Are life insurance policies and retirement benefits subject to probate? Life insurance policies and retirement benefit accounts have beneficiary designations which control their disposition upon your death. Assuming the stated beneficiary survives you, probate will not be necessary. However, if the named beneficiary is deceased and a contingent (back-up) beneficiary isn’t named, probate may be required to determine who is entitled to the asset. There are tax and other planning implications involved in designating a beneficiary-careful consideration should be given when naming a beneficiary. Consult your estate planning attorney for details. What is joint tenancy? Is it true you don’t need an estate plan if you hold title in joint tenancy? Joint tenancy with right of survivorship (sometimes abbreviated as JTWROS) is a form of holding title to an asset. When one joint tenant dies, the property passes to the surviving joint tenant. Probate is not required; the surviving joint tenant simply records a document called “Affidavit-Death of Joint Tenant” along with a certified copy of the deceased joint tenant’s death certificate. There are some problems with joint tenancy: -If the other joint tenant fails to survive you, probate will be necessary to determine who should receive the asset; -Property held in joint tenancy does not receive a full stepped-up basis for capital gains tax purposes; -Placing someone’s name on your property as a joint tenant in order to avoid probate may subject you to adverse gift tax consequences or may expose the property to the other joint tenant’s creditors. |
