Be Aware of How Your Assets are Titled When Using A Will For Your Estate Plan
By M. Keywood Deese
If you and your spouse are using a Last Will and Testament as the cornerstone of your Estate Plan, be very careful about how your assets are titled. Most couples record their assets, like their residence and bank accounts, as owned “Jointly with the Right of Survivorship.” Therefore, at the first death, the survivor owns the home in accordance with the deed. The property will then pass under the survivor’s will to the ultimate heir.
On the death of the survivor, the residence will pass in accordance with the survivor’s will, if he or she has not re-recorded title to the home with a new joint owner with the right of survivorship, such as a new spouse or one of the adult children.
Some people are so interested in avoiding probate that they over use listing all of their assets in “Joint Ownership with a Right of Survivorship.” That’s alright for a couple, but it is not a good practice for a father/child, grandmother/grandchild, aunt/niece, etc… When an older person lists a younger person as a “Joint Owner with the Right of Survivorship” on their residence, bank accounts, certificates of deposit, etc… the younger person now owns 50% of each asset on which they are named. If the younger person has credit problems, a divorce, or a bankruptcy, they have placed their older relative’s assets at risk.
Often a widow or widower will add a younger heir as a POD on their accounts. POD stands for “Pay Upon Death” that a bank will take as an account designation as to who receives the money at the account owner’s death. This is a great convenience because the person named on the POD does not become a joint owner on the account; therefore, you avoid putting the older relative’s assets at risk.
M. Keywood Deese is the senior vice president & trust officer at Vision Bank, N.A. of Ada and can be reached at 580-332-5132.