The term estate planning can be intimidating to some, but that doesn't need to be the case. Planning for how property and debts are to be handled after a death should be viewed as a series of tools. You might be surprised at how easy it can be to address a major aspect of most estates, so read on to find out about using real estate deeds to avoid probate.
Probate and Real Estate
Typically, everything a person owns has to pass through probate when they pass away. Probate is usually a requirement in all states unless the deceased has little to no property. Nothing happens very quickly in any legal matter, and probate is no exception. The probate courts must review all property that will be passing on to the beneficiaries as well as all debts. Once all the bills and tax obligations of the estate are paid, the property is distributed to the beneficiaries. This months-long process causes an inevitable delay when it comes to the distribution of property. There are alternative ways of dealing with estate property that helps keep them away from probate and changing a real estate deed is one of them. One of the most popular and commonly-used deed designation used in estate planning is joint tenancy with rights of survivorship (JTWRS).
Joint Tenancy with Rights of Survivorship
This way of titling a deed should be considered in two parts. Joint tenancy means that more than one person has equal ownership of a piece of property. These types of deeds are stand-alone designations. When you add the right of survivorship onto the term, you get a deed that allows the surviving party or parties to inherit the ownership share of a deceased party. In almost all cases, property ownership must be expressed in equal shares.
For instance, you and your sister own a piece of property in joint tenancy with rights of survivorship. If your sister should die, you are now the sole owner of the property. There is no need for your sister to make other plans for you to inherit the property because you are already on the deed. This means the property comes to you automatically with no need to go through probate.
Speak With an Attorney
While this deed designation is beneficial to many, it may not be the best idea for everyone. Be sure to discuss the potential pitfalls about JTWRS designations with your attorney. For example, once you create this type of deed, all of the parties listed on it are owners of the property. If one party should declare bankruptcy or suffer from financial problems, it could place the property at risk.
Contact an estate planner for more help.
