Everyone should know the following facts relating to their property (estate)
1. You should know who inherits your estate if you die intestate (without a Will).
- The intestacy laws do not protect domestic partners. The law favors distant blood relatives (even those whom you've never met) or estranged parents and siblings, over unmarried domestic partners.
- The laws of intestacy supercede your expressed, but undocumented desires. (see Dead Man's statute).
2. Property represented by title (such as real estate, stock, bank accounts, vehicles, etc.) which you own with another or others, as "joint tenants" (rather than as "tenants in common"), will pass to the surviving joint tenants. The intestacy laws and your Will have no control over property owned in joint tenancy. This is the case even if you specifically mention the property in your Will.
(Your estate planning attorney should also ask to see any paperwork documenting title to ensure that the property will pass under your Will, or to a surviving joint tenant, as you like).
3. Your life insurance policy and IRA also pass directly to beneficiaries. You may make your estate or trust your beneficiary, but then you make the proceeds tied up in probate and/or may make the proceeds liable for creditor claims against your estate.
4. As long as you are married, even if you have been separated for fifty years, your spouse is entitled to an intestate share (if you die without a Will), or an elective share (if you die with a Will).
5. If/when you get divorced, your beneficiary status of spouse is revoked....??? uus! confirm this!! Regardless if you protect them in your life insurance policy.
6. Wills must go through probate. Trusts do not. Probate is not evil. There are some circumstances under which probate can be beneficial. So, whether it is to your benefit to avoid or to "use" probate depends on the circumstances of your particular case. Be wary of any lawyer who claims that either a Will or a Trust is always the best option.
7. Through the probate process, Wills become public record. (Recently, the dispositive provisions of Don Knotts' Will were broadcast on Entertainment Tonight). Trusts do not become public record, as long as your estate planning attorney uses an "affidavit of trust" rather than the trust itself, as back-up documentation for deeding real estate and other titled property into the trust.
8. If you make a gift valued at more than $12,000 (or $24,000 if you and your spouse make the gift together) to any single person or entity in any tax year, you must file a gift tax return, form _____________. However, you will not have to pay any gift taxes until the total accumulation of your annual gifts which exceed $12,000 exceeds $1,000,000. This same $1,000,000 is applied to estate taxes...
9. It is not in the best interests of your beneficiaries for you to gift (during your life), rather than devise (at your death) appreciable property (ex. real property, stocks, etc.). Those who inherit your appreciable property at your death receive the benefit of a stepped-up basis for purpose of calculating any capital gains. Whereas those who receive your property as a gift, during your lifetime,
- Your beneficiaries who inherit from you, any capital gains are based on the fair market value of the property at the date of your death.
- Your beneficiaries who receive "gift" from you, any capital gains...
10. Do not trust that your family and friends, because you told them what you want when you die, that all is taken care of without a Will. Dead man's statute, prohibit those from testifying from the grave. However, you may make a holographic Will.
11. While marriage invokes certain privileges under the intestacy laws, do not assume that (doctors will necessarily enforce your spouse's) your spouse will necessarily be able make medical decisions for you when you become incapacitated. Sciavo case. The Sciavo case is a case on point... a living will would have addressed the situation. No, also need a power of attorney. A medical power of attorney is necessary... and it can either supercede the living will, or direct that the living will supercedes.
14. The following property passes under your Will:
- Real property with title solely in your name
- That portion of any real property which you own as a co-tenant
- Bank accounts titled in your name
- Your Personal property
The following property does not pass under your Will (even if it is referenced in your Will):
- Real property titled with you as a joint tenant
- Specific beneficiary designations
- Property owned by a trust
15. If you are contemplating marriage...
- can't divest your spouse... without a pre-nuptial