A common question from my clients: “How do I make sure that the right people will get my property after my death?”
The classic answer has always been “do a will.” But that will only take you so far. A will takes legal effect upon your death when it is admitted to probate. However, not everything passes under a will. So what are the other ways for ownership to pass?
A beneficiary designation is one way. Retirement accounts such as an IRA for 401k pass by the beneficiary designation you make by contract. They do not pass under our will. This would also be true of insurance policies. The beneficiary designation controls, not your will.
A bank account can pass by a POD, or payable on death designation. If you have a joint account with a right of survivorship, then ownership passes to the joint owner on the death of one of the account holders. Like the retirement accounts, the bank account contract controls, not your will.
A trust can pass ownership of assets at death, but only for property owned by the trust. One of the most common errors made in estate planning is to set up a trust, but not to fund the trust by transferring ownership of property to the trust. Again, the terms of the trust control over a will as to property owned by the trust.
The 2015 Texas Legislature authorized a transfer on death deed, which transfers ownership of real estate on your death to a named beneficiary. There are some specific rules: you can’t do a transfer on death deed by using a power of attorney, and the deed must be recorded before your death. If the proper procedures are followed, then your will does not control the transfer of the real property.
You can see that planning for transfer of your assets on death involves much more than just executing a will. Sit down with your lawyer and go over all your assets, how they are titled and decide which is the best way to pass ownership to the persons you want to receive them.
Call Hammerle Finley Law Firm at 972-784-0293 for help. The information contained in this article is general information only and does not constitute legal advice. ©2017