Having a will or a living trust in place is a great start to a comprehensive estate plan. However, it is also important to make sure that all of your assets are titled in a manner that will ultimately accomplish estate planning objectives.
The most common forms of ownership are as follows:
Sole ownership (“fee simple” interest) occurs when an asset is titled solely in one individual’s name. The asset becomes part of the owner’s probate estate upon his or her death and will be distributed according to the terms of the individual’s will or, if there is no will, then according to the intestacy laws of the State of Wisconsin.
Tenancy in Common
Tenancy in common occurs when title to an asset is held in the name of two or more individuals as “tenants in common”. In Wisconsin, tenancy in common is the default ownership characterization when the instrument of title is silent on the issue and when property is held jointly between non-married individuals. When property is held as tenants in common, each tenant owns his or her share of the property and has no rights in the interests of other owners; interests can be owned in different percentages. Any owner can transfer his or her interest without the consent of the other owner(s). Upon transfer, the new owner becomes a tenant in common with the other existing owner(s). The owner’s interest becomes part of his or her probate estate upon his or her death.
Joint tenancy with rights of survivorship (JTWROS) occurs when title to an asset is held in the name of two or more individuals as “joint tenants”. In Wisconsin, with regard to a homestead, survivorship marital property is the default ownership characterization when the instrument of title is silent and when property is held solely between husband and wife. When property is held as joint tenants, each tenant has an undivided right to the enjoyment of the property. When a joint tenant dies, that owner’s interest transfers outside of probate to the remaining joint owners. However, while a joint tenant is alive, he or she can transfer his or her interest to another person. Upon transfer, the new owner becomes a tenant in common with the other existing owner(s).
Trust ownership: Property titled in the name of a trust is governed under the terms of the trust instrument and generally transfers to the designated beneficiaries outside of probate.
By reviewing and adjusting when necessary the title of each asset you own, you can ensure your estate will be distributed according to your ultimate plan.