The Wise and the Wary
Who can you trust? Deb hears this question over and over again in her professional practice as an elder law attorney and a fee-only, holistic financial planner. Let Deb teach you how to protect yourself and your assets from those who might not have your best interests at heart. [Editor's note: Deb no longer contributes to Silver Planet, but we have made her archived blog entries available as a service to our readers.]
All of My Property Goes Through My Will, Right?
Misconception #1 of “The 12 Biggest Misconceptions of Estate Planning Clients”
Most people know what they own, but few people know how they own it. Unless you’re single with very few assets, this may describe you. How can this be?
Here’s a common scenario. Husband and wife bought their house 10 years ago, and they own it 50/50. But what does the house title actually say? If the title says “jointly” or “joint tenants” or “joint tenants with right of survivorship,” then the house will automatically become the surviving spouse’s sole property upon the death of the other, with no probate process necessary. If those magic words don’t appear anywhere on the title (at least in Colorado), then the deceased spouse’s “half” might have to pass according to the will, or by state law if there is no will.
Why “might”? Because the husband and wife may own the house via a revocable trust … or an irrevocable trust … or as tenants by the entirety … or as partnership property or an LLC asset—or maybe they recorded a beneficiary deed.
These are just some of the possibilities for real estate. Add in non–real estate property, and the possibilities balloon: multiparty accounts, payable-on-death accounts, securities registered in transfer-on-death form, insurance and annuity beneficiaries, IRA and 401(k) beneficiaries.…
You’ll save time and money by figuring out how you own what you own before seeing your estate planning attorney. The attorney can’t tell you what will happen to your property upon your death without knowing this critical information, and only you can provide that.
By Deborah Hoskins, JD, CFP
The Wise and the Wary Blog
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