Other Methods of Transferring Property

There are other forms of property ownership you can use to accomplish your estate planning goals.  These include:

Pay-on-death (POD) bank registrations
This allows you to transfer any money in the account to one or more persons in the event of your death.  You can do this with any kind of bank account, including savings, checking or certificate of deposit accounts.  POD registrations are very easy to set-up (normally a simple form provided by the bank), and are free.  During your life, the beneficiary has absolutely no right to the money in the account. You can withdraw some or all of the money, close the account or change the beneficiary at any time. When you die, the beneficiary claims the money simply by showing the bank the death certificate and personal identification.

Joint Tenancy
Some property owners will hold their real and personal property in joint tenancy with rights of survivorship. This property does not go through probate. However, common ownership in and of itself does not create a right of survivorship. Property held as tenants in common or in corporate or partnership arrangements would still have to go through probate.

Joint tenancy can be desirable for people who buy property and want to share ownership, including inheritance rights. But transferring property from sole ownership to joint tenancy with someone else simply to avoid probate creates several problems that wouldn't occur if a living trust was used instead. For example, if you make someone else a joint owner of property that you now own yourself, you give up half-ownership of the property. The new owner can sell or mortgage his or her share, or it could be lost to their creditors in a severe debt situation.

Also, if one of the joint tenants became incapacitated and could not make decisions about the property, the other owner would have to go to court to get the authority to sell it or obtain a mortgage. In addition, if you make another person a co-owner by creating a joint tenancy, and exceed federal gift tax limitations, a gift tax may be assessed.