How individuals hold their valuable resources may impact what happens with those assets after an owner dies. Frequently, people simply add their most valuable assets to a will or use them to fund a trust.
However, probate court proceedings and trust-related complications can interfere with timely access to those resources and cause numerous challenges for spouses, children and other chosen beneficiaries. Testators thinking about the access of their loved ones and the disputes that could arise in probate court may want to change how they own certain resources.
From changing how they hold title on their home to filing special paperwork with financial institutions, there are ways to help loved ones access key resources promptly after an owner passes away.
Deeds and beneficiary designations are helpful tools
Property and vehicle owners in Georgia can hold title as joint tenants with rights of survivorship. A spouse or adult child living with a parent as a caregiver can become a co-owner who automatically inherits the other owner’s interest in the property at the time of their passing. The same is true for a vehicle owned jointly before the primary owner’s death.
It is possible to make similar arrangements for financial accounts, including retirement savings accounts, investment accounts and standard checking/savings accounts. Transfer-on-death and payable-on-death beneficiary designations allow for the prompt transfer of ownership after a current account holder dies.
This arrangement helps bypass the challenges of making a child or other family member a co-owner. Adding another adult to an account may allow them to use the contents as they see fit, which could lead to financial misconduct. There is also the possibility of creditors making a claim against the account in the event of a debt-related lawsuit, the loss of step-up opportunities, the risk of ineligibility for state benefits and even unequal inheritances to consider.
Transfer-on-death arrangements only transfer ownership after the current account holder dies, thereby allowing them to retain sole ownership while they are still alive. This approach is helpful, but it does require occasional reviews.
Out-of-date beneficiary designations that contradict a will can leave people with a false sense of security regarding their estate plan. People may need to name contingent beneficiaries, integrate a use per stirpes designation to allow an account to pass to a beneficiary’s heirs, avoid naming minors as direct beneficiaries and ensure their filed paperwork aligns with will and trust paperwork.
For those with large estates, complex assets or contentious family dynamics, a revocable living trust may be a better solution. The assets owned and managed by the trust can bypass probate court, and beneficiaries can receive support without losing eligibility for state benefits or squandering a lump-sum inheritance.
Working with an experienced estate planning attorney can help people maximize what their loved ones inherit and minimize what resources must pass through probate court. Changing ownership of assets currently or arranging for a posthumous change of ownership can be a useful probate avoidance strategy in this regard.