It is said that a little bit of information is a dangerous thing, and this certainly enters the picture when it comes to the process of estate planning. You may hear bits and pieces from others who do not have an understanding of the total picture, and if you take their advice, you and/or your family may pay a price later on.
In this blog post, we will take a look at some of these ill-conceived notions so you can be prepared to steer clear of “simple solutions” that may not be so simple at the end of the day.
Payable on Death Accounts
When you open an account at a bank or a brokerage, you can add a beneficiary who would assume ownership of the account after you die. This is called a payable on death or transfer on death account. It should be noted that the beneficiary who you name would have no access to the funds while you are alive.
After your passing, the beneficiary would obtain your death certificate and present it to the financial institution. At that point, if everything was in order, the account would become the property of the beneficiary.
That sounds like a neat and tidy approach to estate planning, but there are limitations and drawbacks lying just under the surface.
Most people want to leave assets to more than one person, and this is one problem. You may be able to add multiple beneficiaries, but you would typically be required to allow for equal distributions among them. This may not be consistent with your wishes.
An individual will sometimes open one of these accounts and tell the beneficiary to distribute the assets to a number of different people in certain increments when the time comes. There is nothing to legally compel the beneficiary to follow these verbal instructions, so people who you love could be disinherited if you go this route.
There are other ways to get assets into the hands of your loved ones in the ideal manner, so there is no reason to take any risks or conform to a prescribed set of limitations.
Joint Tenancy With Right of Survivorship
If you own your home, you can add a co-owner to the title or deed of the property. This is called the condition of joint tenancy, and it comes with right of survivorship. After you die, the surviving joint tenant would assume total ownership of the property. This transfer would take place outside of the legal process of probate, and that is a positive.
That’s the end of the good news when it comes to joint tenancy…
When a co-owner is added, this individual would own half of the home immediately. As a result, you could not sell the property independently, and this is one potential problem. Secondly, the portion of the home that is owned by the other person could be attached if they run into legal or tax problems.
Once again, there is no reason to settle for this flawed approach when there are effective estate planning solutions for the transfer of real property.
DIY Estate Planning
You may be drawn in by the ads that you see online about do-it-yourself legal documents and use a download to create your own last will. Staffers from the highly regarded publication Consumer Reports did just that, using tools that are sold by three of the leading online purveyors of boilerplate legal documents.
They engaged three legal professors to examine these last wills. The attorneys found flaws, and they stated that unwitting users could create wills that yield unintended negative consequences. The publication ultimately advised against do-it-yourself estate planning, so you may want to take their advice.
Schedule a Consultation Today!
Don’t take any risks when reliable estate planning assistance is just a phone call away. You can schedule an appointment with our firm right now if you give us a call at 913-262-2000. There is also a contact form on this website that you can use to send us a message.