Understanding the cost of probate, many people wish to avoid probate when passing on their estate and wealth to their family members. Joint Tenancy is one of the popular choices for this purpose. Most people who choose joint tenancy, however, do not know that in certain cases, joint tenancy is not the best option to protect their assets. Not only that, it can even end up getting them stranded financially, such as the situation below.
Joint Tenancy and Marital Interest
Martha, a widow, decided to enter a joint ownership with her son for all of her property including her house. She did so to ensure that the property can be transferred to her son, the joint owner, without going through probate.
Martha only realized the issues years later, when her son and his wife separated. When Martha wanted to sell her house and move in with her son, she learned that she cannot do so without the signature of her daughter-in-law. As the legal spouse of Martha’s son, the woman has a marital interest in the property.
The daughter-in-law, at this point, refused to sign the deed without any compensation. Martha and her son were stuck in a dilemma, as they did not know the spouse can be included in any joint ownership that her husband enters. Martha did not realize that by setting up a joint ownership, she would no longer have full control of her assets.
Avoid Probate with a Living Trust
This is just one of the many stories that we heard over the years. Many people understood the cumbersome and lengthy process of probate. The good news is that many have planned ahead to avoid probate. Unfortunately, not everyone chooses the right option. When it is not done properly, joint ownership can backfire and the owners may get caught in a legal dilemma.
The best way to avoid probate, without losing control of the asset, is setting up a living trust.
With a living trust, you can remain in control of the asset as long as you wish. Even after you put your house, stocks, vehicles, or other assets into a living trust, you can still decide to sell them at a later date, without anyone else’s approval.
The main benefit of a living trust, however, is that you can specify who will take over the control and benefits of the assets when you become incapable of doing so. There will be no probate process and no extra cost. The full wealth is transferred to your true heirs.
To make sure the living trust works for you, however, the trust needs to be set up and holds all the assets you need to transfer. This means, it requires planning ahead. Many people delays setting up a living trust, thinking that they still have time. However, it is always better to stay prepared rather than leaving your family stranded.
To learn how you can set up a living trust and ensure your family’s future, contact a living trust expert today at Heritage Living Trust.
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