Just like everything we do in life that involves the law, there are pitfalls. So, to is the estate planning process. There are things that we may do for reasonable reasons, but that can have a negative affect on our estate plan.
Throughout our financial life, we have accounts that can have joint ownership, including just about any financial account, like bank and brokerage accounts. For these accounts, when we die, they automatically pass to the co-owner. Joint ownership can be a way to pass assets to another outside of the probate process. Though, it can also cause issues if that joint account owner is only so named to help the primary holder during their life. The most common example is when a child is placed on an account to pay the parents’ bills. If that parent passes, that child will get that account, regardless of what the will states.
Spouses or adult children living in a home
The family home can be the most valuable asset in one’s estate. But, it is also the home for us and our children. This can cause issues after we pass. If we have a home that we jointly own with a prior spouse, if we have an adult child still living in the home, etc., these all can complicate an estate plan. This is why it is so important to have specific conversations with family members to see how they want to handle real estate. It may be that one child may want to live there, and the others may want to sell it. This means, the family will need to decide if the child who wants the home will have to buy-out the property from the other children, pay rent or some other work around.
What can we learn?
For our Millville, New Jersey, readers, the key thing to learn from this is that, even when we do things that make sense at the time, there may be consequences for our estate plan later. This is why it is so important to check back in with one’s estate planning attorney periodically to see if updates are needed, or if something that we are doing could hurt our estate planning goals.