Estate planning is very important, and it must be handled with care and thoughtfulness. Many people take a simple approach and simply add the names of spouses and/or children to bank accounts and deeds. There are some very serious potential pitfalls in doing this, however. It is best to work with a Groveland estate planning attorney to decide how to plan your estate, even if you own property jointly.
Joint ownership between spouses means that both have equal ownership in all the assets in the estate. Your Groveland estate planning attorney will tell you that owning property in joint names is advantageous insofar as it allows the lion’s share of the estate to avoid probate. This means both a substantial savings and also immediate access to funds in the estate once the one spouse dies.
There are several types of joint ownership:
• Joint tenants with full rights of survivorship allows for the surviving spouse to become sole owner of assets upon the death of the other.
• Tenants in common, on the other hand, differs significantly. In essence, when the first spouse dies, the portion of the estate that belongs to the survivor is made immediately available to her. However, the assets belonging to the decedent pass through probate.
• Tenants by the entirety works similarly to joint tenants insomuch as all assets jointly held pass directly to the surviving spouse.
There are some basic disadvantages to setting up an estate with joint ownership. If, for instance, you and your spouse wish for the children to inherit the estate ultimately, you might think that it is a good idea to add one child’s name onto a joint ownership. Even if this is done with the understanding that the child will, upon the death of both parents, share assets in the estate equally with other siblings, he is not legally obligated to do so.
Moreover, since none of the other children were listed as joint owners, any money they receive will be subject to gift taxes, which only allow for a minimal distribution annually before this tax is invoked. Currently this figure is $14,000. The estate may also be subject to estate taxes and capital gains, depending upon the nature of the asset.
Estate planning is very important. If you are considering how to plan your estate, it is very important that you work with a Groveland estate planning attorney who can help you set it up in the most advantageous way. Call Merideth Nagel, P.A., Attorney at Law, today at 352-404-4634.
Serving West Orange County, Lake County, Sumter County & Marion County