Do I Need A Plan If I Have Titled My Assets Correctly?Share this post
Do I Need A Plan? That is My Main Concern
If all my property is in joint name with my spouse, is that sufficient? Do I need a plan if my assets are all correctly titled? First, the question seems to assume that planning is only about assets. As discussed above, plans are used for many other purposes beyond passing money and personal items to the next generation. Nevertheless, since assets are also involved, this is a good question.
There are several ways in which property can be titled. For example, one person can own property in one name. More than one person can also own it in joint names under one of four main structures:
1. As joint tenants with right of survivorship,
2. As tenants by the entireties (a form of joint tenants property between husband and wife that is available in certain states),
3. As tenants in common, and
4. As community property (a form of ownership between husband and wife that is mandatory in 9 states and optional in Alaska).
The type of ownership will determine how your interest in the property passes at your death. Title equals result. For example, a will controls only those assets owned by an individual in his or her own name. Your interest in joint tenancy property passes by operation of law at your death, to the surviving joint owner, even if you tried to leave your interest in the property to someone else through your will. Both wills and joint ownership are generally anticipating a death transfer. Ownership in a trust allows for lifetime planning as well, and includes specific transfer instructions that joint ownership cannot.
So, while joint ownership provides a method of transfer when the first spouse dies, it does nothing on the second death because the ownership has passed to one individual. And, in the event of a common disaster (husband and wife killed in a car accident for example) if property is owned jointly without an accompanying plan, the property would be subject to intestacy laws. That means the state would decide how the property will be distributed to the remaining heirs.
Do I Have to Give Up Control in Order to Accomplish This Planning?
There is one common theme we hear from every person who begins the planning process. Everyone wants to maintain control. In fact, one of the most important things about a good estate plan is that it enables you to do exactly that. It protects your power to make decisions— during life, during periods of disability, and even after death.