In determining how to effectively transfer property from one generation to another, parents will often look for the easiest and cheapest way out. Unfortunately, what looks easy can result in complexity, and become both expensive and inconvenient for the very people for whom you were trying to provide and protect.
The most common Non-Probate Transfer of ownership interests include:
I. Joint Tenancy with Right of Survivorship (JTROS)-It's easy to add another name to a deed, a title or an account, but complexity can result, i.e. : (1) Loss of Control: The person or persons whose names were added now own the property as much as you; (2) Tax Consequences; (3) Risk: Such transfers can place your property at risk in regard to divorces, bankruptcies, casualty claims, judgment creditors, or lawsuits of each added owner(s); (4) Incapacity Probate proceedings may encumber your property if any of the joint owners' become incapacitated; (5) Depending on which 'owner' actually survives, the pattern of distribution could be different from what you intended.
II. Beneficiary Deeds (BD); Transfers on Death (TOD); or Pay on Death (POD)
clauses:
- BD - Transfers Real Property, effective at the death of the owner by deed.
- TOD - Transfers ownership of vehicles or assets at the death of the owner.
- POD - Transfers ownership of accounts (i.e. checking, savings, investment accounts, etc.) at the death of the owner.
Whether BD, TOD, or POD, if the underlying assumptions fail, the whole concept fails.
III. Durable Powers of Attorney (designating another to act for you):
There are two categories of durable powers of attorneys (D P/A):
- D P/A for Health combined with a Health Care Directive is a legal document in which the person creating the DP/A designates what medical procedures will occur, and who "AGENT" is to act in matters effecting health.
- D P/A for Specific (limited) or General (broad) Purposes is a legal document in which an "AGENT" is designated to act concerning assets, if the Grantor becomes incapacitated.
The bottom line is that any of these shortcuts, which may appear to be the easiest and cheapest way, may end up being ineffective and very costly to your family. Before acting, one should always seek legal advice from a competent estate-planning attorney.
To reach Lewis Law Office, P.C., call 816-524-3200 or visit http://www.lewislivingtrust.com/
The Lewis Law Office accepts clients from throughout Missouri, including Belton, Blue Springs, Gladstone, Grandview, Greenwood, Harrisonville, Independence, Kansas City, Lee's Summit, Liberty, Peculiar, Pleasant Hill, Raymore, Raytown, and all cities within Clay County, Jackson County, Platte County, Cass County, Johnson County, and Lafayette County.