Probate avoidance
Typically, a couple owns their assets jointly. If one dies, the other becomes the sole owner. If you’re single, assets you own in your sole name must go through probate, which can be expensive. To avoid this problem, you could:
- Create a revocable trust and transfer your assets to yourself as trustee. You’ll keep complete control until you die, but following your death, trust assets can be distributed without probate.
- Name a person as a beneficiary on your assets.
- Name someone as a joint owner. This is not a perfect solution, as this can expose the assets to risk if the joint owner gets sued or divorced, and you are trusting the joint owner to do what you want after you die. But otherwise, this is an inexpensive way to avoid probate.
- Give assets away before you die. This can also be done through a Durable Power of Attorney. This can allow you to keep control of your assets until just before you die, and then assets can be given away, avoiding probate. This option can also save estate tax on your death.
Asset protection
If you’re worried that all your money may go to a nursing home, to protect your assets is to give them away (to one or more persons or to an irrevocable trust) and wait five years. This strategy also ends up avoiding the probate process (see above), and you could also structure this to avoid estate taxation.
The point is that your estate planning options are different when you are single. You should review your estate plan with an elder law attorney.
It’s important to plan ahead and work with an elder law attorney who can help develop a plan that is suited for your goals and needs. For more information, visit Frank and Mary’s YouTube channel, youtube.com/elderlawfrankandmary. These programs also air on MVTV (Comcast Channel 13), along with “Frank and Mary on Martha’s Vineyard,” where Sandie Corr-Dolby and I address common issues facing seniors and available resources. If you have any questions, please contact me at (508) 860-1470 or abergeron@mirickoconnell.com.
Arthur P. Bergeron is an elder law attorney in the trusts and estates group at Mirick O’Connell.
