After someone dies, the normal treatment is for his/her estate to be probated through the supervision of the court. This process is frequently lengthy with even basic estates taking over a year to complete. More significant assets may lead to an even longer probate period. The process is typically troublesome due to the requirement of a lot of filings with the court. It can often be expensive, too.
Joint Tenancy Concepts
Joint renters are co-owners. They have equivalent rights to property. When a joint tenant owner dies, his/her share of the property is soaked up by the remaining joint occupants. He or she has no interest to communicate in the property at the time of death, so this property passes beyond the probate process. Joint occupancy can be used with financial accounts like checking account and real estate. Even if an individual specifies that property owned as a joint occupant is to be divided according to instructions in his/her will, these guidelines are not followed and the joint tenancy prevails.
Some people refer to joint accounts as a “pauper’s will” because these accounts have the capability to pass beyond the probate procedure. An individual who owns property as joint renters with another who would have passed the property to the very same joint occupant can do so without the requirement for a will. Relying exclusively on this kind of ownership can trigger possible problems.
There are a number of prospective issues that can be caused by relying exclusively on this form of estate planning, including the following:
Having a joint tenancy in property creates current ownership rights. Even if the original account holder states that they are including another individual’s name to the account for simpleness and to avoid making a will, state law usually finds that joint occupants have the equivalent right to the property. This implies that if a parent puts an adult child’s name on his or her account that the child can easily use the funds in the account. Similarly, if a child’s name is put on a deed to a property, she or he has immediate rights to that property.
No Duty to Divide
The moms and dad might want the child to divide the profits of the funds in the account with other kids or other beneficiaries. If a parent lived with an adult child who primarily handled a caregiving role, the adult child may feel entitled to a greater share of any remaining possessions due to providing this caregiving. Even if the will states the funds in the account ought to split, the joint occupancy concepts will usually apply. Some states do permit a will to show whether joint accounts should be divided, however they might need very specific language to this impact and might need particular referral to the account. An individual who is added to a deed to real property is not required to divide the genuine property after the specific dies.
Absence of Instructions
When a person relies exclusively on joint occupancy, there may be an absence of directions concerning other property if the owner did not develop a will. Member of the family may be in conflict about what their reasonable share of the inheritance. These conflicts can frequently become extremely emotional and may lead to lawsuits.
Not Preventing Probate
In some instances, joint occupancy does not prevent probate. For example, if the property is owned as joint tenants and the owners pass away in a common mishap or within a brief time of each other, the asset might still go through the probate procedure. As soon as an owner dies, the other owners take in that interest. If there are deaths within a brief period of time of each other, the law might have default rules that make it as though both individuals passed away at the same time. It may be difficult to determine if either owner lawfully owned the property at his/her time of death. If the law presumes that a remaining owner had an ownership interest at the time of this or her death, the property would be considered an asset of the estate and would still require to be probated.