Frequently Asked Questions

Joint tenancy is the most common form of asset ownership between spouses (sometimes called Tenancy by the Entirety or “TBE”). Joint tenancy has the advantage of avoiding probate at the death of the first spouse. A surviving spouse who owned property as TBE should not add the names of any other relatives to their assets — doing so may subject their assets to loss through the debts, bankruptcies, divorces, or lawsuits of any additional joint tenants. Joint tenancy planning may also result in increased estate tax liability.

A will is the document that a person drafts to provide for the orderly disposition of their assets after death. Wills do not help anyone avoid probate; wills have no legal authority until the testator (the person drafting the will) dies, and until the original will is presented to the probate court.

Anyone with minor children should have a will, because a will is the only document that allows for the appointment of a new guardian for an orphaned child.

Special testamentary trust provisions in a will can provide for the management and distribution of assets and may help avoid taxes.

Sometimes called an Advance Directive, a living will allows a person to record their decisions regarding the types of medical care they would prefer to have if they are ever suffering from a terminal condition (without reasonable hope of recovery) and cannot express their wishes at that time. A living will is often executed along with a Health Care Power of Attorney, which is a document that gives someone the legal authority to make health care decisions on behalf of another person.

If a person dies without even a will, they die “intestate.” The state will determine (according to the laws of intestacy) who will inherit their assets — and when they will inherit them.

Beneficiary designations can help avoid probate on the transfer of some assets after death. The Laws concerning which assets may be transferred without probate (non-probate transfer laws) vary from state to state. Examples of assets that commonly provide specific beneficiary designations include life insurance policies and bank accounts. Be sure that your beneficiary designations are current, because they will take priority over any provisions contained in a will or in a trust.

A durable power of attorney appoints one party (a person, a group of people, or an entity) to make decisions on behalf of another party. If someone does not have a valid power of attorney, and they become incapacitated, they will most likely be involved in a probate proceeding known as either a guardianship or conservatorship. Without a properly executed power of attorney, a judge will determine who should make decisions for the incapacitated person under the ongoing supervision of the court.

A revocable living trust is an agreement with three parties: the grantors or settlors (trust-makers), the trustees (or trust managers), and the beneficiaries. For example, a husband and wife may name themselves as all three parties to create their trust, manage all the assets transferred to the trust, and then reserve the right to use the trust assets as beneficiaries. Further “back-up” managers or trustees can step in under the terms of the trust to manage the assets should the husband and wife become incapacitated or die. Special provisions in the trust could also control the management and distribution of assets to other beneficiaries in the event of the grantors’ death. With proper planning, the couple in our example can also avoid or even eliminate transfer taxes on their estate. A revocable living trust can usually accomplish all of these objectives without any court proceedings.

It really does not matter if you are young or old, rich or poor, married or single – if you owned titled assets (such as a house), and you want your beneficiaries to avoid court interference should you pass away or become incapacitated, you should consider having a revocable living trust.