Question: What are some common methods of titling assets and how does it affect ownership of the asset upon death?
Answer: Your best-laid plans for the distribution of your wealth when you die might not go as intended if you do not pay close attention to the titling of your accounts and your designation of beneficiaries. While these are basic items, the way in which an account is titled and beneficiaries are designated have legal significance and can supersede your estate plan.
Typically, personal accounts are owned entirely by you, i.e. titled solely in your name; owned jointly, i.e. as husband and wife; or owned by a trust. An IRA is an example of an account that must be titled solely in your name. Other accounts, however, can be owned entirely by you, jointly with others, or by your trust.
Types of joint ownership in Florida include joint tenants with right of survivorship, tenants in common and tenants by the entireties. The titling of an account impacts your estate plan because an account that is owned jointly with a right of survivorship will pass automatically to the survivor or survivors of the joint owners regardless what your estate planning documents provide.
Beneficiary designations allow you to designate who will own your account after you die. Many different types of accounts allow you to make beneficiary designations. Like account titling, beneficiary designations can impact your estate planning.
To ensure that account titling and beneficiary designations match your estate planning, you should review them on a regular basis or when a life event occurs; i.e. marriage, death or the birth of a child or grandchild. This way, your accounts will not be left to the wrong person.
If you have questions about this article, give Michael Barnes a call at 480-333-3955. We are always happy to answer questions or help you with any of your needs.
Question: How often do I need to review my estate plan?
Answer: Although there are no hard-and-fast rules about when you should review your estate plan, a good rule of thumb is to do a review immediately after any major life event, once a year for a quick review based on the economy or tax code changes, and every five years for a thorough review. You should consider reviewing your estate when other circumstantial events happen in your life, such as:
- Your marital status has changed or the marital status of your children or grandchildren has changed
- There has been an addition to your family through birth, adoption or marriage
- Your spouse or family member has died, become ill, or is incapacitated
- There has been a substantial change in the value of your assets or in your plans for their use
- Your income level or requirements have changed
- You have made a change in your estate plan (e.g., you created a trust or executed a codicil to your will)
- The executor, trustee, or guardian changes his or her mind about serving in that capacity Reviewing your estate plan will not only give you peace of mind, but will also alert you to any changes that need to be addressed.
If you have questions about your estate plan, talk with your advisor or give Michael Barnes a call at 480-333-3955. We would be more than happy to help or do a complimentary review of your estate plan.
