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Family Matters Newsletter
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Is Your Property Titled To Avoid Probate?
I
frequently get questions from my clients about how to avoid probate by
retitling property. If your desire is to avoid probate, a properly
funded revocable trust can do that. However, certain types of property
ownership can also avoid probate. There are three categories of
property ownership – property titled in your name, in joint names with
others, or by contract. Below is a summary of each type of property
ownership and whether or not you can use it to avoid probate. 1. Individual Ownership Individual
ownership refers to property that is titled in your name only (i.e.,
owned by you). When you pass away, property owned in your name will
usually have to go through probate to change the ownership from your
name to the name(s) of your beneficiaries. 2. Joint Ownership
Joint ownership has several different forms: Joint
tenancy with right of survivorship (JTWROS) – With JTWROS, all of the
owners hold an equal right to the property. Any owner can withdraw
funds from an account without the knowledge or permission of the other
owners. When one joint owner dies, ownership of the property
automatically transfers to the surviving joint tenants without going
through probate. Tenancy
by the entirety (TBE) – TBE is a type of joint ownership with rights of
survivorship and can only exist between a husband and wife. Either
spouse can withdraw funds from an account without the knowledge or
permission of the other spouse. When one spouse passes away, ownership
of the property automatically transfers to the surviving spouse without
going through probate. Community
property –This is a type of joint ownership also can only exist between
a husband and wife. Each spouse’s ownership rights in community
property are set by your state laws. Tenancy
in common (TIC) – With TIC, each owner (tenant in common) owns a
specific percentage or piece of the property and can withdraw or sell
his/her piece of the property. When a tenant in common passes away, his
or her share of the property passes to his or her beneficiaries.
Depending on the estate plan of the owner who passed away, TIC may or
may not avoid probate. 3. Title by Contract Title
by contract covers payable on death (POD) and transfer on death (TOD)
accounts as well as life insurance, retirement accounts, 401(k)s,
annuities, and Revocable Living Trusts, which all name specific
beneficiaries. When the owner of the property passes away, the property
passes to the designated beneficiaries without going through probate. |
You’re invited to call or
e-mail. "If you have questions about estate planning, asset protection, assisted reproduction or surrogacy, please send your e-mail today to nicole @ kinseylawgroup.com or call (301) 968-1630." — Nicole
Phone: (301) 968-1630 * Phone: (202) 643-1837 * Fax: (888) 559-8856
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2006 Kinsey Law Group. All Rights Reserved. Kinsey Law
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