Titling your assets is essential for securing your financial future and safeguarding your legacy. Asset titling involves much more than just putting your name on a deed or account.

Benefits of Proper Asset Titling

Proper asset titling is often overlooked, yet it offers a multitude of benefits.

Efficiency of Settlement

Crisis points in your estate are times when you might suffer from a cognitive disability or when you die. Regardless of your perfect and pretty your will or trust may be, if your assets aren’t titled properly, that collection of paperwork you spent time and money with an attorney to create may not do what you expect it to do at your death or disability. You may have heard growing up that “haste makes waste.” In this world of severely limited attention spans, people view efficiency as equaling instant gratification. However, types of titling that can produce instant transfer of title upon death may also create a shorter time period for paying certain taxes.

Understanding the ripple effects of titling property is important before deciding what estate plan is best for you. A more efficent settlement may be to delay payment of certain taxes until after the home is sold rather than be required to pay 90 days after death. Delaying the tax requires that title not pass instantly when the owner dies.

Avoid Probate

Even with an estate plan, probate may be necessary. Why? Because people don’t title their assets to work with their estate plan if their plan is designed to avoid the probate administration process.

Probate is the court supervised transfer of legal title to the rightful heirs of the deceased. The court validates the will and ensures the right people get the right assets per the instructions.

This can be a good thing that delays payment of certain taxes, but it can be very time-intensive and costly, depending on where you live. Plus, your entire estate becomes public information. Properly titling your assets can help avoid probate.

Out of Public View

If privacy is important when it comes to managing your assets, you can create a personalized estate plan that is designed to keep assets out of the public files while maximizing your control and direction. Your estate plan can do this while delaying the payment of certain taxes. Proper titling with purposeful planning lets you keep sensitive financial information out of the public domain, shielding your assets from unnecessary scrutiny or exploitation. Strategically titling your assets gives you more control and peace of mind.

Understanding Different Titling Options

There’s no one-size-fits-all approach to asset titling. Here’s an overview of common options:

  • Individual Ownership: You have complete control, but the asset is subject to probate and creditors’ claims.
  • Joint Ownership with Rights of Survivorship: Ownership automatically passes to the surviving owner upon death, avoiding probate. There can be negative tax consequences for this type of ownership and subject assets to the liability of your co-owner.
  • Tenancy in Common: Ownership percentages are specified, but probate applies when one owner passes away.
  • Payable/Transferable on Death (POD/TOD) Designation: Beneficiaries receive the asset directly, bypassing probate for accounts like bank accounts or investments. It is the beneficiary’s lottery day – unless the wrong beneficiary is named. If the beneficiary receives disability benefits, naming them as POD or TOD will likely disqualilfy them from their benefits and create more problems than it helps. It really does happen.
  • Trusts: Offer flexibility and control. You can name a trustee to manage assets while you’re alive and distribute them according to your wishes after your passing.

Regularly reviewing your titling ensures that your plan aligns with your current needs and future goals. Remember, your assets are a means to create a lasting legacy for yourself and your loved ones. Proper titling empowers you to do just that.

By controlling how your assets are titled, you can achieve peace of mind, knowing your wishes will be carried out efficiently and your inheritance will be protected. With all of the moving parts, and the potential to inadvertently create problems for your people, you want professional assistance in your estate planning. Edward S. Clay, P.A. Law Offices can help you. Get in touch with us now to get started on securing your future.