Estate planning is not a process you can or should rush through. You need to consider all the options available for protecting assets and inheritances. When determining the transference of property, people want to avoid as much of the probate process as possible. Many people assume that using joint ownership will protect an asset upon their death, but that is not always the case. The protection of an asset from probate delays depends on a joint tenancy.
Understanding Joint Tenancy
Joint tenancy describes the ownership of a property. Essentially, a property held in joint tenancy is owned equally by two or more people. Therefore, upon the death of one of the owners, the ownership of the property is transferred to the surviving owner or owners. The primary benefit of joint tenancy is that the asset — whether personal accounts, vehicles or properties — can avoid probate. Therefore, the survivor receives ownership sooner. However, not all property types can be jointly held. It is up to the state to determine what property is permissible under such an arrangement.
Using Joint Tenancy in Your Plan
The avoidance of probate is the primary reason to use joint tenancy. Probate is time-consuming, and creditors are often given priority over beneficiaries when it comes to the distribution of assets. Property held in joint tenancy, however, is not subject to probate because ownership automatically transfers to the surviving owner, which ensures that certain assets are protected.
The Continued Need for a Will
Joint tenancy does not eliminate the need for a will. As not all property can be held jointly, you will need to determine how those other assets are distributed after your passing. A will is also essential if you have small children because it will lay out guardianship.
Is Joint Tenancy Right for You?
Joint tenancy is not always the best solution to protecting an asset. For example, it does not account for incapacitation or divorce. If you want to preserve an asset, then consider creating a trust to hold it.
Consulting with an Attorney
Coming up with an estate plan is not easy, and the larger your estate, the more complicated the process. Therefore, it is wise to consult with a licensed attorney who practices estate law. They can help you determine the best financial vehicles for your assets.
You need to understand all of the estate tools available to you to make the best decisions for your assets and beneficiaries. Contact a lawyer, like an estate planning lawyer in Memphis, TN from Patterson Bray, for assistance.