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Let’s break down the differences between a joint owner and a beneficiary. It sounds complex but is actually quite simple – the distinction is based on whether the person has access to funds now or later. Joint ownership is particularly common between couples or between a surviving parent and a child. Beneficiary destinations are popular because of their ease of use. However, these methods cannot be considered estate plans. They are just ways of owning property.

Joint Ownership or Beneficiary Designations Could Cost You

With joint ownership, the co-owner will have quicker access to carry out the will instructions but it can also undermine the estate plan in the will and do more harm than good. With joint ownership, if either party experiences financial difficulty such as divorce, lawsuits, or bankruptcy both are affected. The beneficiary designation may divide the assets equally between the children but if one of the children dies before the parent there are no provisions for those grandchildren. So before thinking of those methods as estate planning remember they have a narrow focus and should only be used in limited situations.

Estate Tax Planning Is More Than Tax Planning

If you’ve gone to the effort of creating a will or trust for your assets, you probably feel confident that you’ve rightfully made things simpler for your family in the event of your death. You’ve taken on the bulk of the work and ideally all that’s left is for others to abide by instructions and for your beneficiaries to take possession of the inheritance you’ve left. But upon your death, the estate may still be subject to taxes. The size of the estate subject to paying estate taxes had fluctuated over the last several years. If your estate is less than $5,000,000.00 you may not need tax planning but you still need estate planning. Tax planning is designed to reduce or eliminate your estate tax liability. Estate planning is designed to direct your assets and provide authority to the person you want to act on your behalf. Tax planning should always include estate planning but estate planning does not always need to include tax planning.

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About Helmer Somers Law

Helmer Somers Law helps individuals and businesses navigate the complex system of rules that accompany all legal situations. We are licensed to practice in both Kentucky and Ohio and offers flexible, affordable payment terms for our services. We welcome the opportunity to earn your trust and become your lawyer for life! It’s a fact of life in the modern world. There comes a time for virtually every adult American when the services of a competent, dedicated lawyer are required. Circumstances such as divorce, bankruptcy, estate planning or an income tax audit demand that your rights be protected, and your long-term interests advocated for with diligence and perseverance. When you call Helmer & Somers Law, you can rest assured that they will be.

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