Estate planning is important for all Oklahoma residents with substantial assets. It should be done early to protect your assets and your preferred beneficiaries if the worst were to happen. One way to do so is through the process of asset titling.
The term “asset titling” may be confusing to many newcomers to estate planning. Asset titling can be thought of as a way of determining the manner in which you own certain assets. While you can own an asset in the traditional way, in your own name with no other complexities involved, there are also other options to choose from. This can include legally sharing your ownership with others or by placing your ownership of an asset into some kind of financial vehicle. Asset titling for estate planning is common practice.
Asset titling options
“Titling” is a legal term that describes how you own your asset. There are many different ways to own an asset. Some of the most common options are:
• Under your individual name
• Pay-on-death account
• Joint tenants
• Ownership through a trust, LLC or S corporation
Pay on death accounts
A pay-on-death account may jump out at you. This is an asset that you own and manage in the normal way when you’re alive. However, if you were to die, the assets in this account would automatically transfer to a beneficiary. Titling an asset this way is often part of an estate plan strategy.
The different kinds of joint tenants
“Joint tenants” refers to multiple individuals that own an asset together. For example, a husband and wife who own an asset together could be categorized this way.
There are different ways an asset can be owned together by multiple parties through asset titling. “Joint tenants in common” indicates that people can manage an asset together, like a checking account. “Joint tenants with rights of survivorship” is a designation that works similarly, but it transfers complete ownership to the other tenant upon one tenant’s death. “Joint tenants by the entirety” works similarly but with additional protections against creditors for the surviving spouse.
Without the appropriate asset titling, many of your assets may not end up going to your preferred beneficiaries during the legal process of probate. Instead, properly titling your assets as part of an estate planning process while you are still alive can ensure that your wishes are carried out.