For those working from home and finding a little less work to do, this is the first in a series about using that gift of time.
The most common misconception in financial planning is that the title of something doesn’t matter. WRONG! It is very important. Most people think “Oh, I’ve got a Will that covers everything.” Yes, that’s true and a probate court exists to make sure your written wishes are respected, but your assets then have to go thru the probate court. That’s not a good idea.
First, make a list of ALL assets. It is easy to forget obscure assets. A recent example involved a burial plot bought forty years ago. It is very annoying to take one lousy asset through the probate process – check ALL assets.
Then, don’t assume you already know the title of each asset – DOCUMENT the title. Make a copy of any document that shows the title of each asset, like the first page of a bank statement or brokerage statement. Your family will appreciate it later.
If the title simply says “John Doe”, it will be subject to probate.
If the title says “John and Mary Doe”, it will not be subject to probate at the death of the first but will be at the death of the second.
Same result if it says “John or Mary Doe”.
If the title says “John Doe POD Mary Doe”, it means payable-on-death to Mary but not before – this avoids probate at John’s death.
Same result if it says “John Doe TOD Mary Doe”, which means transfer-on-death to Mary but not before.
Usually, the best title is “John Doe, trustee of John Doe Revocable Living Trust”. We’ll discuss that another day of quarantine.
BONUS TIP: DON’T LOOK AT ASSET VALUES UNTIL THE QUARANTINE IS OVER!