There are many estate planning tools that you can use to protect the interests of you and your family. Jointly held properties allow multiple parties to own a share of the property.
Partnerships in this agreement can consist of spouses, business owners, parents and children, and other combinations of individuals.
But like many estate planning strategies, there are common mistakes that lead to tax issues, the unwanted transfer of property, and other pitfalls.
These and other issues can be avoided through effective estate planning. The following will help you understand how to avoid these and other estate planning issues.
Knowing the Different Types of Jointly Held Property
There are various types of jointly held property agreements. These include community property, joint tenancy, and properties held in trusts.
Joint property may include the right of survivorship. This allows surviving partners to receive full ownership of the property when another joint owner dies.
It eliminates the need to administer any assets through the deceased owner’s estate or transfer any titles.
The different types of jointly held property can result in potential tax and legal issues that you need to be aware of so that you can determine the best estate planning strategy for your needs.
Common Issues Related to Jointly Held Property
Issues related to federal and state taxes are often faced by partners in a jointly held property agreement. In some cases, double estate taxes may be applied, and the entire asset may be taxed within the estate of a deceased partner.
In addition, the portion of the asset can be subject to taxation within the estate of the surviving partner. The surviving partner may also transfer ownership of the property to any individual regardless of the preferences stated by the deceased partner.
If assets are spent by the surviving partner, it may result in an inability of the deceased partner’s executor from paying costs related to settlements and estate taxes.
Estate Planning for Jointly Held Property
Proper estate planning is the foundation to avoiding the issues related to jointly held property agreements. Through estate planning, you plan for the distribution of assets in a way that’s in line with your preferences and long-term goals.
Estate planning lets you identify the potential issues that arise when jointly held properties are used improperly.
An estate attorney provides you with the resources needed to understand your options and make the best decisions for your estate.
Through proper estate planning, you decide which type of joint property ownership can prevent issues related to taxes and asset distribution.
Various types of jointly held property can also be used to avoid probate processed related to the distribution of a deceased partner’s asset share.
This can save time and money while giving all partners the peace of mind in knowing that their property is fully protected.
Jointly held property can be a valuable estate planning tool for individuals and their partners. It can be used to ensure that assets are distributed according to the preferences of each partner while protecting them over time.
The improper use of jointly held property can lead to tax and legal issues. Having a skilled estate planning attorney to guide you will protect you from costly and time-consuming court processes while helping you plan for the future.