The way you title your real and personal property and who you name as your beneficiaries is just as important in your estate planning as your trust says The Black Hills Pioneer’s recent article, “Titling of property is just as important as your Will or Trust.”
There are some kinds of property that, depending on how they are titled or who’s the named beneficiary, will flow outside of the control of your trust.
For instance, if you designate a beneficiary to your life insurance policy or on your retirement account, that money goes directly to the named beneficiary at your death. This process completely bypasses the terms of your trust unless you named your estate or trust specifically as the beneficiary.
Beneficiaries show up on other types of accounts as well. You could designate another person as payable on death (POD) designee or transfer on death (TOD) designee on your investment account or your bank account. These types of accounts also transfer automatically to the named designee and similarly is not controlled by your trust if your trust is not the designee.
This principle applies to real property too. If title to real estate is taken in a certain manner, then jointly owned real estate would automatically flow to the surviving joint owner, not pursuant to your trust. Generally, if language lists multiple individuals on the property as “joint tenants with rights of survivorship,” then the survivor(s) will automatically inherit the decedent owner’s share. Keep in mind, however, that this isn’t automatic just because the property is owned jointly, rather it depends on how the property is titled.
You can, therefore, see how critical it is that you discuss these issues with your estate planning attorney. In addition to questions about trusts, you should also be discussing the titling of your property and the beneficiaries you’ve named on your life insurance and retirement accounts, along with any POD and TOD designees you’ve named on your investment accounts or bank accounts.
If you don’t, you could create problems for your family and loved ones.
Reference: Black Hills Pioneer (August 5, 2019) “Titling of property is just as important as your Will or Trust”