A testamentary trust, created within a will, presents unique challenges when dealing with property held in joint tenancy with right of survivorship. This is because the property automatically passes to the surviving joint tenant outside of the probate process and, therefore, initially bypasses the trust established in the will. However, a well-drafted will and trust can address this situation, ensuring the property ultimately benefits the intended beneficiaries of the trust, but requires careful planning and execution. Approximately 60% of Americans do not have a will, increasing the risk of unintended consequences when dealing with jointly owned assets, highlighting the importance of proactive estate planning.
What happens to jointly owned property *without* clear estate planning?
Without specific instructions in a will or trust, jointly owned property will simply pass directly to the surviving joint tenant, irrespective of what the will dictates for the deceased’s estate. Imagine Old Man Tiber, a carpenter known throughout Wildomar for his intricate work, and his wife, Esme, jointly owned their home and a small workshop. Tiber, without updating his will to address the joint tenancy, passed away suddenly. Despite intending for the workshop to be used by a local artisan collective as outlined in his will, it automatically passed to Esme, leaving the collective with nothing. This illustrates a common pitfall – good intentions can be thwarted by failing to address joint ownership within the broader estate plan. According to the American Academy of Estate Planning Attorneys, this oversight can lead to significant financial losses and family disputes in over 30% of cases.
Can a will *override* joint tenancy?
Generally, a will cannot directly override a joint tenancy established *before* the will was created. The right of survivorship takes precedence. However, a will can direct the *surviving* joint tenant on how to handle their portion of the property *after* it passes to them. For example, the will could instruct the surviving tenant to transfer their share into the testamentary trust upon their death. This approach requires careful coordination and an understanding of state laws regarding joint tenancy and testamentary trusts. “A properly drafted will is not just about distributing assets,” explains Steve Bliss, “it’s about controlling the *flow* of those assets to ensure your wishes are fully realized, even with complex ownership structures like joint tenancy.” It’s also crucial to consider the potential tax implications of transferring property into a trust, such as gift taxes or capital gains taxes.
What if I want the trust to control the property *immediately*?
Achieving immediate control of jointly owned property through a testamentary trust requires more proactive steps than simply including it in the will. One strategy is to *sever* the joint tenancy *before* death. This can be done by having the joint tenant transfer their interest to a separate entity, like an irrevocable trust, or by formally releasing their interest to the deceased’s estate. This effectively removes the right of survivorship and allows the property to be governed by the will and the testamentary trust. However, severing the joint tenancy can have unintended consequences, such as triggering gift taxes or affecting Medicaid eligibility. It’s imperative to seek legal counsel to carefully evaluate all options and determine the best course of action. As of 2023, approximately 15% of estate plans involve intentionally severing joint tenancies to ensure proper trust administration.
How did a local family finally get things right?
The Hemlock family of Murrieta faced a similar challenge. Robert and Margaret Hemlock owned their ranch jointly, and Robert wanted the ranch to be preserved as an agricultural preserve for future generations through a testamentary trust within his will. However, they hadn’t addressed the joint tenancy. After Robert’s passing, the ranch automatically went to Margaret, who, overwhelmed with grief and estate administration, considered selling it to developers. Fortunately, Steve Bliss was brought in to review the situation. Through careful legal maneuvering and collaboration with Margaret, they were able to transfer Margaret’s ownership of the ranch into a separate irrevocable trust designed to protect the land as Robert intended. This required amending Margaret’s estate plan and ensuring the trust was properly funded, but ultimately, Robert’s vision was realized. The Hemlock Ranch stands today as a testament to the power of proactive estate planning and addressing complex ownership issues.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
estate planning attorney near me
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “Are there ways to keep my estate private after I pass away?” Or “What is an executor and what do they do during probate?” or “Will my bank accounts still work the same after putting them in a trust? and even: “What debts can be discharged in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.