The first topic will be on the titling of assets. “Titling of assets” means the legal ownership of an asset. Typically, this is solidified throughout the process of purchasing the asset. In the real world, we often buy things without giving the title any thought. In the new car showroom, the last thing asked (if at all) is “how to prepare the paperwork”. In the buying of a piece of land, second home, or other real estate, it is often bought without understanding what this means. As I’m sure you can imagine, this is where we see the nightmare scenarios when an ex-boyfriend, ex spouse, twice removed cousin, or crazy step aunt are titled on the asset from way back, and would be the beneficiary of the asset if anything where to happen to the owner. This is what we want to guard from. In one case, we had a husband pass away at a relatively early age. Years before, his wife and he had purchased a rental property for their son to occasionally use and had unknowingly had their son as co-owner on the deed of the house. Upon the husband’s death, the son inherited the entire property. In a similar case, we saw a young married couple who’s parents inherited their home because they never retitled the property after they were married.
Frank, you made sure we have a will so aren’t we all set? Actually.... No. While Wills are a crucial piece of every estate/financial plan, they aren’t the end all be all. Wills can be contested or sent to Probate court. Both of these outcomes are timely processes and, in some cases, incredibly costly. In addition, if an asset is jointly titled to an individual (the ex-boyfriend, ex-husband, twice removed cousin, or crazy step aunt) the Will is ignored, and the titled individual receives the asset upon the primary owner’s death.
So how do you make sure your assets are titled correctly and your household is covered? Its surprisingly simple. Assess the ownership titling on all of your assets. Look at the deed, ownership paperwork, or related documents. Make sure it is consistent with your short and long-term estate planning objectives. If you have any particular questions or would like to discuss your plan in greater detail, we are here to help. We can walk you through the process of re-titling these assets if need be or give you the security that you have accessed all the assets required.
Hopefully, this has given you food for thought. Next month we will continue the thought with Beneficiary information and how to make sure assets with beneficiary designations go to the right places.