Why Joint Ownership Can Put Your Assets at Risk

Probate is the legal process of wrapping up a person's affairs, paying their
bills, and distributing their assets. And it is not uncommon for this to take several
months to go through the court system. The expenses involved can potentially
include property appraisal, executor fees, court costs, plus legal and accounting
fees. The amount varies depending on your state and the local practice in your
community.

To avoid this burden on their loved ones, seniors frequently transfer assets
into joint-tenancy ownership with their intended beneficiaries. Although this
strategy can reduce settlement costs by eliminating probate, it could open up
another set of problems.

Assets held in joint-tenancy automatically go to the surviving owner when you
die. However, while you are alive, the joint owner can legally withdraw part or all
of the money in the account without your permission. In addition, if he or she gets
into financial or legal trouble, the property could be at risk to creditor claims.
Rather than making a beneficiary a joint owner of your property to simply avoid
probate, you might consider another idea.

An individual can own certain assets and list a beneficiary. At the owner’s
death, the assets pass to the named beneficiary and avoid probate. While you
are alive, your beneficiary does not have access to your account. You can
change beneficiaries at anytime, and you might even be allowed to name a
contingent beneficiary.

A Payable on Death (P.O.D.) registration applies to bank, savings and loan,
and credit union accounts, as well as United States savings bonds. On the other
hand, a Transfer on Death (T.O.D.) registration is used for securities such as
stocks, bonds, and mutual funds (but only if the securities firm allows it). With
both of the above, the beneficiary receives the funds by offering proof of identity
and a copy of your death certificate, regardless of the provisions in your will.

Please note that the assets will still be included in your estate when you pass
away. Estates that exceed $1.5 million are subject to federal estate taxes.

If you are looking for ways to pass property to your heirs in an efficient manner, please contact me for more information. To schedule a complimentary meeting, either in person or by telephone, please use the use the CONTACT US link and let me know.

I look forward to meeting you!