Ownership. The key to avoiding probate and trusts is--ownership! If you've got the right type of ownership for any asset, your survivors can totally avoid probate, and in most cases you don't even have to sign a will, create a living trust, or spend a nickel on a lawyer--including me. Why is an attorney telling you how you can do something for free? Because what I'll discuss is not everyone's cup of tea--and if not, then you might need some legal help.
How you own something is called its "title," like a car is "titled." Take a look at your car registration. If you're married, it might say something like this: "John Jones and Mary Jones." That means the title is in John and Mary's name. What happens if John dies? Mary owns the car instantaneously at the moment of John's death, because the car was "jointly" titled. Mary doesn't have to go through probate to own the car, and she didn't need to have a living trust for the car. She just automatically owns it--without spending anything to get it.
Mary and John's car title is called a "survivorship" title. That means all anyone has to do is survive the other joint owner for the title to be theirs alone.
Survivorship title doesn't just apply to car registration. It can apply to real estate, bank accounts (checking and savings), stock accounts, mutual fund accounts--almost anything that needs a piece of paper on file somewhere to show who owns it.
Survivorship title doesn't have to be between a husband and a wife. It can be between an individual and anyone else, such as your kids. It can even apply if the "anyone else" is not even a human being. Corporations, partnerships, limited liability companies, charities--almost any legal "form" that you can think of can also be the "survivor".
So, you might ask why don't I just put everything I own in survivorship title, and avoid probate and living trusts altogether? Some people do--and many times it saves them a lot of money on probate fees and trusts. However, not every asset is a good candidate for survivorship title. Sometimes putting an asset in survivorship title inadvertently gives the other person something you might not like--such as the ability to withdraw all the money from your account. Can you set up survivorship accounts that keep the "survivorship" aspect, but still give you 100% control over the asset while I'm alive? Sure you can.
Other times putting assets in survivorship title accidently disqualifies the person down the road when they are seeking government or other benefits--like Medicaid.
Other forms of property that don't need probate or trusts to pass title at death include life insurance, annuities, retirement savings plans, and pensions. Make sure to ask ahead what you need to do so that any benefits pass to your family or others outside of probate and living trusts.
But don't fall into this trap. You may have a will which says "I give and bequeath everything I own on my death to Sally." Just because you have that will, it's not automatic that everything you own passes to Sally when you die. Nothing could be further from the truth. A will only affects assets which are in probate. So, if all of your assets are in survivorship title, than there are no assets to probate, and your will is basically useless. You might be surprised to learn that your property will not be left the way you want it to go. And that's where an attorney can help.
An attorney can examine all of your assets and tell you who gets what when you die. If you like the result--fine, the attorney's job stops there. But if you don't, the attorney can suggest different ways, at different levels of cost, to pass your assets. There are many ways to title assets, and an attorney can help you find just the right balance of title and documents--and at the right price.
The Law Office of Jay Fleisher will review title to all your assets and existing wills, trusts, etc., and tell you exactly "who gets what." An "estate plan check-up" of sorts. In addition, Jay can tell you whether you will have to pay estate taxes and if so, how much.