Most people question whether they need wills or not. They believe that since they have smaller size of assets or they have opted for joint ownership, wills are not required.
Probate can be avoided if you keep the name of other person in all your investments, real estate assets and bank accounts as a co owner. There are three basic issues with this arrangement. First issue is that the person whose name you have put in as joint owner may expose your assets to his/ her creditors. In court, your plea that you had opted this person a joint owner to save on taxes may not hold fort. Second issue is control of real estate assets. In some cases, parents have not been able to get their real estate assets back after children decided that they could make better financial decisions. There is huge possibility of friction in family due to this issue.
Finally, third issue is that of capital gains tax. If your heir has been given real estate assets during your life time, then this will mean that they have to pay taxes on gain in value of that particular asset. In case you pass it on after death, capital tax is exempted. This might result in saving lot of money for your heirs. The taxation policy changes due to change in ownership. Internal revenue Service looks at the taxation different in both cases.
When you write the will, you will appoint an executor. In addition to this person, you can appoint an additional person who will depute in case first nominee refuses to discharge the duties. If you do not do so, the court will appoint an executor. This appointment will cost some money. One can avoid paying court fee for appointing a new nominee by putting down two names in the will. There will be no conflict if there are two nominees appointed from your side.
Many states have Statutory Wills. These are forms that are available in public libraries and many other places. Public representatives can provide you the same. These forms are free and if written completely along with witnesses constitute legal documentation. To fill these forms you need not hire attorney. In case you feel that your probate will be complex, then only you have to go for hiring an attorney- it is time to make an estate planning.
To sum up we can say that keeping a joint owner for bank accounts so that they have an access to cash after your death is fine. This will assist your heirs as it will be deemed Payable on Death or POD case. By making a legal heir you also ensure that in case there is a compensation award on your death, accidental death or malpractice, your heirs will get all the money or assets.
