2/20 Titling
Overview of Property Titling and Estate Planning
Understanding property titling is essential in estate planning as it dictates how property is transferred upon death.
Discussions included wills, trusts, estate plans, and probate court.
Key Concepts of Property Titling
Importance of State-Specific Laws
Each state has unique laws regarding property titling and transfer.
Common law properties have specific rules depending on the state.
Assets and income acquired in a common law state may give someone a statutory claim to property even if they move out of that state.
Impact of Marriage on Property Ownership
Marriages impact property transfer laws which vary by state.
Some states legally require assets to be passed to the spouse, affecting wills and beneficiary designations.
Example: In Colorado, one may need a spouse to sign a waiver to designate a beneficiary other than a spouse.
Types of Property
Definition of Property
Real Property: Physical property such as homes, apartments, and farmland.
Intangible Property: Rights to things like music, mineral rights, or other non-physical assets.
Digital Assets: Emerging category covering cryptocurrencies and digital ownership.
Types of Ownership
Sole Ownership
Defined as property owned by one individual.
Owner has complete control - ability to sell, gift, or bequeath property as desired.
Tenancy in Common
Multiple owners possess a defined percentage of property; ownership is not equal.
An individual's share can be passed on to heirs upon death as per will designation.
Joint Tenancy with Rights of Survivorship
Owners have equal rights; property transfer occurs automatically to remaining owners upon death.
Tenancy by the Entirety
Specific to married couples; requires spousal consent for any sale or transfer.
Automatically transfers to the surviving spouse upon death.
Community Property States
In community property states, assets acquired during marriage are owned 50/50 by both spouses regardless of whose income paid for it.
Inheritance is typically excluded from community property.
Legal Considerations in Estate Planning
Commingling Assets
Mixing inherited assets with marital assets can complicate future claims and the distribution of estate upon death or divorce.
Key Man Insurance
This insurance can be structured to buy out a deceased owner’s share, ensuring control stays with the original owners.
The Role of Probate Court
If property is challenged in probate court, the ruling can be influenced by the wording of wills and state laws.
Courts have discretion to decide on asset distribution, which can differ from the intended wishes of the deceased.
Conclusion and Recommendations
Proper titling and beneficiary designations are crucial to prevent unwanted probate disputes.
Consult estate planning attorneys familiar with local laws to ensure wills and trusts are valid and reviewed when moving between states.