Jointly held assets, like a home or bank account owned with rights of survivorship, present a unique situation when estate planning with a trust, as they typically bypass the probate process and transfer directly to the surviving owner, regardless of what a will or trust dictates.
Do I Need a Trust if I Already Have Joint Ownership?
Many individuals assume joint ownership automatically provides the same benefits as a trust, but this isn’t always the case. While joint ownership avoids probate, it doesn’t offer the same level of control or protection a trust provides. Approximately 60% of Americans die without a will or trust, leaving assets to be distributed according to state law which may not align with their wishes. A trust, even with jointly held assets, can ensure specific instructions regarding those assets are followed, such as how income generated is to be used or who ultimately benefits from the asset after the surviving owner’s passing. For instance, a couple might jointly own a beach house but want to ensure, after both are gone, it’s sold and the proceeds distributed to their favorite charity – something a trust can easily facilitate, while joint ownership alone cannot.
Can a Trust Override Joint Ownership Rights?
Generally, a trust cannot directly override existing joint ownership with rights of survivorship. However, a carefully drafted trust can include provisions to address jointly held assets. One common strategy is to direct the surviving owner to transfer the asset *into* the trust after the first owner’s death. This requires cooperation from the surviving owner, but it allows the trust to then manage the asset according to the grantor’s wishes. Additionally, a “pour-over” will can be utilized to capture any assets held outside the trust, including those held jointly, and direct their transfer into the trust upon death. It’s crucial to remember that California, like many states, has specific laws governing joint ownership, and these laws take precedence over conflicting instructions in a will or trust. Approximately 37% of estate planning mistakes stem from not properly coordinating wills, trusts, and beneficiary designations.
What if I Want to Keep Joint Ownership But Still Have a Plan?
It’s possible to maintain joint ownership while still creating a comprehensive estate plan. A good strategy involves using a trust to manage assets *separate* from those held jointly. For example, a couple might hold their primary residence jointly but place their investment accounts and life insurance policies into a trust. This allows the trust to provide for their family and manage any tax implications while the jointly held property passes directly to the surviving owner. I once worked with a retired teacher, Margaret, who owned a small cabin with her brother. She wanted her portion of the cabin to eventually go to her daughter, while her brother’s share would stay with his family. We structured her estate plan to leave her interest in the cabin to a trust, with instructions for its eventual transfer to her daughter, while respecting the existing joint ownership agreement with her brother. This provided her peace of mind knowing her wishes would be honored.
What Went Wrong for the Henderson Family?
The Henderson family experienced a frustrating situation when their father, Robert, passed away without a clearly defined plan for their jointly owned vacation home. Robert and his sister, Carol, owned the property equally, and Robert had a trust leaving his share to his children. However, because of the joint ownership, Carol automatically inherited Robert’s share, regardless of the trust’s instructions. This created a significant conflict, as Robert’s children wanted to sell the property, but Carol wanted to continue using it. Legal fees mounted, family relationships strained, and ultimately, they had to engage in lengthy negotiations to reach a settlement. It highlighted the crucial need to address jointly held assets proactively in estate planning, avoiding unnecessary complications and heartache for loved ones. This could have been avoided with a little foresight.
How Did the Millers Get It Right?
The Millers, a couple with a similar situation, consulted Steve Bliss early in their retirement planning. They owned a lake house jointly and had a trust in place. Recognizing the potential issues, Steve advised them to execute a “contractual will” or “joint will”, which essentially obligates the surviving owner to transfer the jointly held property into the trust after their death. This ensured that the lake house would be managed according to their wishes, providing a comfortable vacation home for their grandchildren for years to come. By proactively addressing the issue of joint ownership, they avoided the legal battles and emotional distress experienced by the Henderson family. Their meticulous planning allowed their family to enjoy the property as intended, creating lasting memories without the shadow of conflict.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “How can I make sure my children are taken care of if something happens to me?” Or “Can I challenge a will during probate?” or “Can retirement accounts be part of a living trust? and even: “What documents do I need to file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.