I usually love doing housework, because, while doing so, I am not wasting any time, but I am also not racking my brain addressing the most intellectually demanding work of our law firm.
Of all the positive aspects of doing housework, the best may be using my clothes washer and dryer. All I have to do is sort my clothes and load the machines. The machines do the work. Eventually, I fold and iron, but while the machines are working, work is getting done, but I am really not working.
I get excited to do dishes or other housework while my clothes machines do their thing. Although I generally dislike and discourage multitasking, when I can do laundry and other housework at the same time, I am the biggest fan of multitasking.
As with most aspects of life, there are ways to multitask estate planning.
Usually, estate planning involves two primary objectives (a) getting assets to desired recipients when the current owner dies and (b) doing so while avoiding probate.
As for getting assets to their proper eventual owners, a properly signed and witnessed last will and testament usually gets that job done. However, everything that is distributed pursuant to a will necessarily goes through probate.
There are three primary methods to ensure that assets get to their intended, post-death recipients AND avoid probate.
First, most bank and investment accounts and real estate can be jointly owned with the owner who survives the death of the earlier owner or owners (literally called the “survivor”) owning all of the jointly owned account or real estate. In the banking context, it is common to call such accounts simply “jointly owned.” In contrast, in the real estate context, it is common to refer to such real estate as being in “survivorship.”
However, it is important to note, for most bank accounts, a non-owner can be made a signer or authorized representative on those accounts. Notably, being a co-signer or authorized representative on someone’s bank account does not make that person someone who will own the account when the actual owner dies.
Second, life insurance, bank accounts, retirement accounts and annuities can be organized with designated owners or recipients upon death of the current owner. The person receiving these items upon the current owner’s death are called beneficiaries, transferees or payees.
Determining which of the various terms (beneficiary, transferee or payee) applies generally depends upon the type of account that is at issue. Accounts that do not have to be liquidated or closed out (like IRAs) typically call the receivers of the account assets “transferees.” Accounts that are liquidated upon the owner’s death, like checking and savings accounts, are typically designated as “payable on death” and refer to the receivers of the money as “payees.”
Third, the ultimate, multitask tool that facilitates non-probate distribution of assets is a trust. Trusts can handle this double-tasking for just about any assets except “qualified” retirement accounts (unless the trust is specially written to accommodate those accounts).
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.