- 1. Surviving Joint Tenants Don’t Have to Share
I have seen it a thousand times, a parent puts one child on title to a bank account or a house to “help manage” that asset. Well, the law presumes automatically that you want that asset to go 100% to the surviving joint tenant. If that is not your intent, then DO NOT set up joint tenancies. Surviving joint tenants do NOT have to share, so keep that in mind when setting up joint tenancy.
- 2. Your Will probably Controls Nothing
Your Will only controls assets held in your individual name. That means any Trust assets, joint tenancy assets, beneficiary designations, and pay-on-death/transfer-on-death account do not pass under the terms of your Will.
- 3. Trusts are meaningless without assets
If you created a revocable Trust, but you did not transfer any asset to it, then your Trust is meaningless. A Trust only controls assets transferred to the name of the Trustee. Without that transfer, your Trust is a pile of documents that do you no good when you need it most.
- 4. Divorce Does Not Affect Insurance Beneficiaries
Here is a shocker, in California a legal divorce will severe all sorts of joint ownership rights, but it will NOT affect the named beneficiary under a life insurance policy. That means that if your ex-spouse is named in your insurance as a beneficiary, they WILL RECEIVE the death benefit unless you change it after the divorce.
- 5. The Law Presumes You Know What You Are Doing
So many people have no idea what affect the titling of their assets have after they are gone, but the law assumes you know exactly what you are doing. That means it is up to your children to fight about it in court if you do something you do not intend to do. That’s where planning comes in. Even if you do not create a Trust, you can still plan out your affairs to be sure that your intent takes affect after your death.
- 6. Pay Now or Pay Later—Lawyer’s Prefer You Pay Later
Talking about planning, estate planning is far cheaper than dealing with the messy aftermath of an unplanned estate. Many people do not engage in planning because they don’t want to pay for it. But an unplanned estate will cost far more in the long run than the price of a good estate plan. Where a good estate plan may cost $3,000 to $6,000; a Trust or Will lawsuit can cost $30,000 to $50,000. Which one would you rather pay? So pay now or pay later—and lawyers much prefer you pay later by the way.