If you’re just beginning your estate plan ventures, you may have trouble understanding how property ownership fits in with your estate planning. And, you likely don’t realize the significance of proper asset ownership.
It’s important to understand how each of your assets will be distributed after your death as well as how they are controlled or not controlled by your estate planning documents. Take a look at the below information, to better understand property ownership and its effects on your estate plan.
- Individual Property will Go Through the Probate Process
Whether you choose to create a will or trust or neither, the assets that you own in your individual name will likely go through the probate process in California if their total value exceeds $150,000. During the process, your will, if properly drafted, is used to determine how the assets will be distributed. If there is no will, your assets will be distributed based on California laws of intestacy. If you want to have a say in how your individual assets are distributed, then you must create a will or trust. If you have sizeable assets and want to avoid probate, a living trust is generally the better option.
Remember if you rely upon only a will, your will only controls assets that are individually owned by you. Even if you specifically mention assets owned in joint tenancy or assets with beneficiary designation, such as life insurance, retirement accounts and annuities, or assets held in trust for another individual, your will as no control over these assets.
- Jointly Owned Property is Not Yours to Distribute after Your Death
If you own property in joint tenancy with another individual, you’re giving him or her rights to the assets if you predecease them.
Take a look at our next blog post (part 2 of 2), to learn more about joint ownership and other forms of ownership as well. It’s important to understand how your property ownership fits in with your overall estate plan so that you’re able to reach your goals.