There are many ways to structure your estate plan to help ease the job of your personal representative after your death, as well as the procedural hoops that your family members must jump through before actually receiving the assets you want to pass on to them. Certain planning tools such as irrevocable trusts, transfer-on-death deeds, or gun trusts are all special ways to pass on your assets without forcing your family to deal with the probate process. Another way to make sure that an asset passes directly to another person is to add that person’s name to a title while you are still living. This is most commonly seen with bank accounts or real estate. Some people decide to make another person a joint tenant to their home or add the person to their savings account. While this can be a quick way to make sure the person receives the asset as soon as possible, there are some pros and cons to this strategy.
The most obvious and immediate advantage, as mentioned above, is that adding someone to the title of one of these assets could allow the asset to pass immediately upon your death. For example, if you and your child own a piece of real estate as joint tenants, then once you pass away, the entire interest you held in that real estate passes immediately to your child. Avoiding the probate process and allowing your friend or loved one to immediately dispose of an asset can be immensely helpful to your potential beneficiaries. Another benefit for adding someone to your bank account is that person can have access to your funds while you are still living if you were to need assistance with making sure your bills are paid or receiving payments from debtors.
The main drawback to adding someone to your real estate deed or to your bank account is that person may then have immediate rights and access to that asset. If you add someone as a joint account holder on your checking account, that person could potentially go in and spend all the money in that account. Because the person’s name is on the account, the bank is not liable for this issue. For real estate, the person may acquire the right to improve, change, or obtain a mortgage on the property. In other words, you need to make sure you completely trust any person you decide to add to your real estate or bank account.
If you are considering how best to pass your assets on to your family and loved ones, you need to talk to an experienced attorney. Contact us today at 651-371-9117 to talk about your case.