Estate Planning Hazards

Life is chock full of road hazards. Estate planning helps avoid the known hazards and best prepare for those unknown by learning from the experiences of others who have been down the road before. Let’s consider two common sources of dangerous estate planning hazards: beneficiary designations and joint tenancy ownership.

Beneficiary Designations:

• virtually any titled asset may pass directly upon death
• non-probate transfer laws
• simple; no attorney required

… But watch out for:

• certain terms of your estate planning legal documents (i.e., will, trust) not applying
• disinheriting some of your heirs
• wishes not taking intended effect due to out-of-date beneficiary designations

Joint Tenancy Ownership:

• most common form of asset ownership (i.e., bank or brokerage account, real estate)
• Tenancy by the Entireties is available to assets held solely between spouses
• trusted non-spouses may be added as joint tenants (i.e., family members, friends)
• upon one joint tenant’s death, the remaining joint tenants continue to own the asset (without probate)

… But watch out for:

• one living joint tenant must not be incapacitated
• liabilities through your joint tenant (i.e., divorces, lawsuits, creditors)
• remarrying may ultimately send assets from the children of the previous marriage to new spouse (or stepchildren)

Closing Thoughts

As with any decisions affecting beneficiary designations and asset titling, be sure to consult with an experienced estate planning attorney. Otherwise, you may fall victim to some extremely unpleasant legal hazards.

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