Welcome back to this week’s blog. This week will be the second week of a short miniseries about estate planning mistakes people make which cost a lot of money and aggravation. We hope you enjoy this week’s article, which focuses on property transfer.
One way to transfer wealth is thru a transfer of property directly to your heirs. However, this “solution” that might sound good at first, may ignore several important realities. For instance, what if a child you transfer your estate to is too immature to handle the responsibility of a large sum of money on his or her own? What if the child suffers a severe financial setback that puts the inheritance at risk to creditors? What if the child marries a fortune-hunter, is addicted to drugs or alcohol, becomes disabled, or gets divorced or remarried? In short, you may need to protect your children and heirs from their own poor decisions.
Another way to transfer property is thru joint ownership. There are two types of joint ownership, Joint Tenancy with Right of Survivorship (JTWROS) and Tenants in Common (TIC). Problems with JTWROS include postponement of probate until last tenancy, loss of the double step-up in tax basis, and outright distribution. With TIC, you also lose the double step-up in tax basis, and your property is subject to the estate plan of each tenant as well as probate for each tenant.
We, at Secure Planning Strategies, help our clients create and maintain a solid and secure financial future when it comes to estate planning and property transfers. It is never too late to take your estate planning in a different direction. If you don’t want to wait for the next week’s blog article and you really want to get started today, please give us a call at: (248) 827-2580 or e-mail us at: email@example.com.
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