Your estate mistakes can cost your family.
Perhaps you know what this entails.
Perhaps you do not.
According to The Hockessin (DE) Community News article “The dumbest estate planning moves,” take the time now to educate yourself on estate planning and the necessary actions to do it well.
One such mistake involves making an adult child a joint owner of property with rights of survivorship.
People believe probate must be avoided at all costs.
Unfortunately, this attitude itself can be quite costly.
The joint owner will become the exclusive owner after the death of the other joint owner(s).
This applies to both real estate and bank accounts.
You may believe your child will share with his siblings after you have passed away.
You cannot guarantee this will happen in a joint ownership situation.
If your child does follow through on your wishes to include his siblings, he may face adverse tax consequences.
The money may be treated as a gift for tax purposes.
If the property is real estate, your child could be hit with a sizeable capital gains tax when he chooses to sell the property.
Probably the worst "unintended consequence" is that the liabilities of the joint owner (e.g., any divorce, lawsuit, or bankruptcy) can threaten the jointly held property.
One way to avoid these issues would be to use a revocable living trust.
Work with an experienced estate planning attorney to address your wishes and your concerns.
She will create a plan to best help you reach your goals, while minimizing your risks.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Hockessin (DE) Community News (April 24, 2018) “The dumbest estate planning moves”