Estate Planning Information from Attorney Douglas Kuthy
This post is one of a series I am writing to educate people about estate planning and probate law. To follow these posts sequentially please visit my Estate Planning Blog. This post is about a crucial concept to estate planning – probate property and joint property.
I hope that this information is helpful to you.
probate property and non-Probate property
Probate property passes under a will. And non-probate property passes without a will. In other words, among other things, joint bank accounts, stock brokerage accounts, retirement accounts, and real estate held jointly pass without a will. However, many people think this type of planning is a good substitute for either a will or a trust centered estate plan. But they are wrong.
Four levels of estate planning
First, do nothing. This leads to an estate planned by the law that goes through probate. But if you thought this works you would not be here now. Second, title property jointly. I will tell you below why this is a bad idea. Third, draft a will – better than joint tenancies – but also leads to probate. Fourth, a trust centered estate plan – the best possible solution.
don’t use joint property as your estate plan
Unless your your real estate is jointly titled as husband and wife a joint title 1) makes your property liable for the other owner’s debts; 2) Allows the other title holders to live, rent and sell the property; and 3) allows the joint title holders to leave their share to their heirs. Clearly this takes away a lot of your control over your real estate. Similar problems occur with jointly titled bank or other accounts.
a will only creates probate property
Disposing of your property by will is better than either doing nothing or joint ownership. But, it is far from ideal because it leads to probate. Please see the following on my website to get more information. Wills v. Trusts
Trust centered estate planning-The key
The link above gives you all of the information you need as to why trusts work better than wills. However, if you want to know more about trusts see this page: Revocable Living Trusts An excellent site for detailed information on estate planning in general is the Motley Fool Estate Planning Checklist