Your assets are everything to you. Your house, vehicles, business, bank account, jewelry, and anything meaningful to you is considered an asset. As you start your estate planning journey, your assets are your number one priority, ensuring they go to the right people after you are gone. To do that, you must go through the process of asset titling.
Asset titling is an essential step in estate planning, and if you want your valuable items to go to the right individuals, here are some things to consider.
Titling Will Supersede a Last Will
The most important part to remember is that any asset titling will supersede whatever is written in your last will. For example, if you have written in your will that the family lake house will be split among your children from a previous marriage, but the house itself is titled under your spouse in your current marriage, your current spouse will continue to have control over the asset. In that case, whoever the asset is titled will be granted ownership rather than who is listed in your last will. It is essential to have these documents match to ensure there are no issues.
How Will You Choose to Title?
Asset titling comes in many forms. As you go through the process with your estate planning attorney, ensure you keep these options in mind.
Individual
Individual ownership of an asset means just that—sole ownership. Once it is yours, you, or whoever the individual is, can choose to sell it, gift it, or do whatever you want. However, under these circumstances, the asset is liable to any creditors or lawsuits that might arise.
Transferable on Death
Transferable or payable on death allows the asset to avoid the probate process and immediately be handed down to the individual you designate. This option is often used for 401(k), IRA, or insurance policies.
Joint Ownership
Joint ownership comes in many forms. For example, Joint Tenants in Common allows for the percentage of ownership between the two individuals to be decided, allowing for a different percentage outcome rather than a 50/50 split. Then, Tenancy With Rights of Survivorship gives both owners complete control with a 50/50 split, and when one passes away, the full 50% is given to the other. Lastly, Joint Tenants by Entirety add an extra level of protection, ensuring that if the survivor has creditor problems, they are not involved with the handed-down asset. With any joint ownership, remember that they will transfer immediately.
Missouri Is an Equitable Distribution State
An important detail to consider when asset titling is that Missouri is an equitable distribution state. Any assets you miss or do not properly title will be given to the state and divided into terms that the court finds suitable. This will likely lead to the assets not being properly handed down or fairly distributed. With this in mind, it is essential to go through the full process of asset titling.
Titling Is Not a One-And-Done Strategy
Like every aspect of estate planning, it is not a one-and-done situation. Your life, priorities, and assets will change throughout the years. It is essential that your financial strategy and assets match through every significant change in your life. Most importantly, you don’t want to set anything in stone too early. Estate planning is a long-term process, so ensure you plan your assets accordingly.
If you have further questions or wish to discuss asset titling, contact the team at Hartmann Law.