Share

Minneapolis Estate Planning and Probate Lawyer Blog

Thursday, October 27, 2011

Property Ownership: Property Titling and Your Estate Plan

I recently met with a client to retitled a home so that an ex partner would no longer be on the deed.  But, upon conducting a record's search, we learned that the client had never added the ex to the title.  It was still titled solely in my client's name. This would have been great news except that my client had paid the ex a significant amount of money to "buy back" the title to the home. Post relationship issues aside this is a good example of how titling of your property is an important issue that must be addressed during the various stages of your life. It can be affected by a new relationship, break up, incapacity or death.

Titling of assets is an especially important issue for nontraditional famlies where the law will never assume that someone unrelated by blood or marriage is entitled to an interest in an asset.  Further, if you are in a second marriage and have kids from a prior relationship, absent clear evidence (i.e. will or trust) of your intent, the Minnesota intestacy statute dictates how your assets wiill be distribued to your current spouse and prior children.

The way you title your assets is a crucial part of your estate plan.  Below we will review the ways in which you may own property.

Coordinating Property Ownership and Your Estate Plan

When planning your estate, you must consider how you hold title to your real and personal property. The title and your designated beneficiaries will control how your real estate, bank accounts, retirement accounts, vehicles and investments are distributed upon your death, regardless of whether there is a will or trust in place and potentially with a result that you never intended.

One of the most important steps in establishing your estate plan is transferring title to your assets. If you have created a living trust, it is absolutely useless if you fail to transfer the title on your accounts, real estate or other property into the trust. Unless the assets are formally transferred into your living trust, they will not be governed by the terms of the trust and the purpose of the trust will fail.  Any property not titled in the name of the trust, and that is not jointly held, will be subject to probate.  If you have a proper will then then that property may still go to your chosen beneficiary through the probate process. But, if you do not have a will, or the will is outdated, that asset may not go to the person you would have chosen if someone had asked.  Well - I am asking now.  Who should get your stuff?

Even if you don’t have a living trust, how you hold title to your property can still help your heirs avoid probate altogether. This ensures that your assets can be quickly transferred to the beneficiaries, and saves them the time and expense of a probate proceeding. Listed below are two of the most common ways to hold title to property; each has its advantages and drawbacks, depending on your personal situation.

Tenants in Common: When two or more individuals each own an undivided share of the property, it is known as a tenancy in common. Each co-tenant can transfer or sell his or her interest in the property without the consent of the co-tenants. In a tenancy in common, a deceased owner’s interest in the property continues after death and is distributed to the decedent’s heirs. Property titled in this manner is subject to probate, unless it is held in a living trust, but it enables you to leave your interest in the property to your own heirs rather than the property’s co-owners. The drawback is that the co-tenant may now share ownership of the property with someone they don't know, or worse, don't like. This can lead to a host of issues that will be discussed in a later post specificlly addressing the issues of  all types joint ownership of property.

Joint Tenants:  In joint tenancy, two or more owners share a whole, undivided interest with right of survivorship. Upon the death of a joint tenant, the surviving joint tenant(s) immediately become the owners of the entire property. The decedent’s interest in the property does not pass to his or her beneficiaries, regardless of any provisions in a living trust or will. A major advantage of joint tenancy is that a deceased joint tenant’s interest in the property passes to the surviving joint tenants without the asset going through probate. But, Joint tenancy has its disadvantages such as susceptability to creditors or the inability of any one owner being able to sell his or her interest in the property. 

Make sure your estate planning attorney has a list of all of your property and exactly how you hold title to each asset, as this will directly affect how your property is distributed after you pass on.  One way to handle this is to give your estate planning attorney the autority to discuss your plans with your financial advisor and/or insurance agent. Automatic rules governing survivorship will control how property is distributed, regardless of what is stated in your will or living trust. So, take care to review how your property is titled today!

 

 


Archived Posts

2014
2013
December
November
October
September
August
June
May
April
March
February
January
2012
December
November
October
September
August
July
June
May
April
March
February
January
2011
December
November
October
September
August
July
June
May
April
March
February
January
2010


From within Hennepin County Unique Estate Law represents estate planning and elder law clients throughout Minnesota, including Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, St. Paul, and Brooklyn Park. The Minnesota law firm of Unique Estate Law focuses on all aspects of estate planning, including specialized wills, trusts, powers of attorney and medical directives for married couples, young families, blended families, single parents, gay families and those going through a divorce. Unique Estate Law also handles probate administration, asset protection, Medical Assistance planning, elder law, business succession planning, adoptions and cabin planning.



© 2014 Unique Estate Law | Disclaimer
3800 American Blvd., Suite 1500, Bloomington, MN 55431
| Phone: 952-955-7623
333 Washington Avenue North, Minneapolis, MN 55401
| Phone: 952-955-7623
5775 Wayzata Blvd., St. Louis Park, MN 55416
| Phone: 952-955-7623

Asset Protection | Business Succession Planning | Cabin Planning | Estate Planning | Estate Planning for High Net Worth Individuals | Estate Planning for Unmarried Couples | Guardianships | Incapacity Planning | Planning for Children | Special Needs Planning | Small Business Assistance | Advanced Estate Planning | Estate Planning | Fees | Probate

TwitterLinked-In PersonalLinked-In CompanyBlog RSS

Attorney Website Design by
Amicus Creative