Using Joint Ownership to Avoid Probate
Preventative maintenance isn’t just for your home and vehicles. It’s also for when you’re handling your assets.
Probate doesn’t need to happen. You can have a will and several trusts in place, but joint ownership is another method that you can also be implemented. There are multiple different kinds of joint ownership (some of which are mentioned below). Certain kinds are designed to ensure that probate doesn’t happen.
Joint ownership is a great method in case you’re looking to pass on an asset or two while maintaining your ownership. You may have already share joint ownership of a house or car because you signed with your spouse. However, there might be other assets that you have which might still be open to going through probate. So, here are a few things to consider in case you’re looking to visit a probate lawyer for help.
Pick the Right One
One kind of joint ownership may not fit all. That’s probably one of the larger factors you need to consider first. In general, there are about three kinds of joint ownership that you need to worry about. As for the other kinds of joint ownership, they might not help you avoid probate, resulting in potentially wasted effort. As a general rule, just double check with a probate lawyer before you finalize on any kind of joint ownership.
Joint tenancy in Minnesota with right of survivorship, community property with right of survivorship, and tenancy by the entirety are three examples or joint ownership that should normally work. The key word you want to look for is survivorship. Ownership methods with survivorship in the name should normally prevent that asset from going to probate. However, not all states utilize the same regulations for certain forms of joint ownership, making some kinds exclusive to married couples and/or registered domestic partners.
Don’t Forget the Debt
Just because you can avoid probate doesn’t suggest that you can forget about debts. You may have heard this a thousand times before, but one of the only kinds of debt that normally disappears upon death is student debt. Any other debt you’re probably going to have to deal with. Someone must be paid and someone must be the metaphorical piggy bank from which that money comes. On a similar note, probate is not avoided once/if both owners pass. So, if both owners pass and there’s still debt to pay, the assets might disappear.
Remember that when you share joint ownership with someone, you may find yourself paying off their debt. This is a warning. Debts are normally settled during probate for most items. Items held in joint ownership may avoid probate, but the debt collector may come knocking eventually. Joint tenancy can help transfer the title of the property, but that also means that the responsibility for paying off that property is sometimes carried over as well.
Possessions to Consider
To ensure that you hold joint ownership and/or to give you ideas of what can be held under joint ownership, here are two general lists. The two items on the first list, vehicles and real estate, shouldn’t come as much of a surprise. It makes sense to have joint ownership for items that you and your significant other utilize equally, making them necessary components regardless of who outlives the other.
The four items on the second example list all involve money. Stocks, bonds, bank accounts, and brokerage accounts can normally be owned jointly. As for checking any of the above kinds of property, whether a part of the first or second list, that can vary from item to item. For the first list, check deeds, registration slips, and certificates of ownership. For the second list, check passbooks, registration cards, stock certificates, bonds, and account statements. If you’re having trouble checking, consider contacting a probate lawyer for direct assistance.
More the Merrier
Two is company, but three or more might be the right number for joint ownership. As a warning, anyone who you make an owner might obtain the same powers as you have. Be careful to trust before you entrust. The obvious advantage is giving more individuals access to and power over various assets. Maybe you want your son/daughter and their spouse to have ownership over your home as their family serves as your live-in caretakers, allowing them to retain the property once you pass.
Moreover, having multiple owners can help prevent probate should one or more person suddenly depart from this world. Going back to the previous example, say that your son/daughter-in-law unexpectedly dies in a car accident. Your son/daughter still has you to hold the property further preventing probate from becoming problematic. They can remarry and with your blessing, add their new spouse onto the property to help maintain it. Probate can strike when your property isn’t properly passed on.
Probate Prevention
To prevent probate as much as possible, a probate lawyer is probably your best assistant. As a tip, go to the law firm of Flanders Law Firm LLC. You can call them at 612-424-0398 and set up a meeting.
You may or may not have all your assets lined up properly, but it never hurts to double check if everything is set in legal stone. They can also help you with other ways of preventing probate like creating a will and/or creating trusts. When you visit, you may even want to consider bringing your present will and/or any trusts that you own. They can help you figure out preventative ways to reduce the chances of dealing with probate.
Sources:
https://www.target.com/p/8-ways-to-avoid-probate-12-edition-by-mary-randolph-paperback/-/A-53506195