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While transfer on death (TOD) deeds might not be applicable to real property in certain states, they can be used for other assets. Payable on death (POD) accounts operate similarly, designating a beneficiary to automatically inherit the property or account without probate upon the account owner’s death. The primary difference between a POD designation and jointly owned property is that the designated beneficiary on a POD account has no legal ownership interest in the account while the owner is alive.
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Creating a life estate allows the Grantor to bestow the right to reside on and use the property to a life tenant (typically the Grantor). Upon the life tenant’s death, full ownership automatically passes to the designated remainderman, such as an adult child. Parents often use a life estate to easily set up the transfer of their primary residence to an adult child when they pass away.
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Co-owners can transfer their share of jointly-owned property by titling it as joint tenants with rights of survivorship. Upon the death of one joint tenant, the decedent’s interest automatically transfers to the surviving joint tenant(s) without undergoing probate. Married couples frequently title real property as JTWRS because it offers a quick and easy way to transfer one spouse’s ownership in the marital residence to the surviving spouse upon his/her death.
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Trusts, categorized as testamentary or inter vivos (living trusts), offer a relationship where one party holds property for the benefit of another. Unlike assets governed by a Will, trust assets bypass probate, allowing for swifter distribution after death. A trust also provides flexibility in staggered property distribution and protection of assets for minor beneficiaries.
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A Last Will and Testament allow the Testator to make specific or general gifts of estate assets to beneficiaries, to be honored upon the Testator’s death. While a Will provides a straightforward means of transferring property at the time of death, assets gifted in a Will typically undergo the prolonged probate process before distribution, prompting individuals to explore alternative methods for estate asset transfer.
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You have the option to directly transfer property to beneficiaries while you are alive. This may involve signing over a deed or title to real or personal property or handing over possession of personal property to the intended recipient. While you certainly can make direct transfers during your lifetime, be aware that gifts made during your lifetime may impact your estate’s exposure to federal gift and estate taxes during the probate process after you pass away. To avoid lifetime transfers being taxed, make use of the yearly exclusion that lets you make gifts valued at up to $17,000 each year (as of 2023) to an unlimited number of beneficiaries.
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While transfer on death (TOD) deeds might not be applicable to real property in certain states, they can be used for other assets. Payable on death (POD) accounts operate similarly, designating a beneficiary to automatically inherit the property or account without probate upon the account owner’s death. The primary difference between a POD designation and jointly owned property is that the designated beneficiary on a POD account has no legal ownership interest in the account while the owner is alive.
-
Creating a life estate allows the Grantor to bestow the right to reside on and use the property to a life tenant (typically the Grantor). Upon the life tenant’s death, full ownership automatically passes to the designated remainderman, such as an adult child. Parents often use a life estate to easily set up the transfer of their primary residence to an adult child when they pass away.
-
Co-owners can transfer their share of jointly-owned property by titling it as joint tenants with rights of survivorship. Upon the death of one joint tenant, the decedent’s interest automatically transfers to the surviving joint tenant(s) without undergoing probate. Married couples frequently title real property as JTWRS because it offers a quick and easy way to transfer one spouse’s ownership in the marital residence to the surviving spouse upon his/her death.
-
Trusts, categorized as testamentary or inter vivos (living trusts), offer a relationship where one party holds property for the benefit of another. Unlike assets governed by a Will, trust assets bypass probate, allowing for swifter distribution after death. A trust also provides flexibility in staggered property distribution and protection of assets for minor beneficiaries.
-
A Last Will and Testament allow the Testator to make specific or general gifts of estate assets to beneficiaries, to be honored upon the Testator’s death. While a Will provides a straightforward means of transferring property at the time of death, assets gifted in a Will typically undergo the prolonged probate process before distribution, prompting individuals to explore alternative methods for estate asset transfer.
-
You have the option to directly transfer property to beneficiaries while you are alive. This may involve signing over a deed or title to real or personal property or handing over possession of personal property to the intended recipient. While you certainly can make direct transfers during your lifetime, be aware that gifts made during your lifetime may impact your estate’s exposure to federal gift and estate taxes during the probate process after you pass away. To avoid lifetime transfers being taxed, make use of the yearly exclusion that lets you make gifts valued at up to $17,000 each year (as of 2023) to an unlimited number of beneficiaries.
Contact Us
If you have additional questions, contact an experienced Indianapolis, Indiana estate planning attorney at Frank & Kraft. by calling (317) 684-1100 to schedule your appointment today.
