When it comes to estate planning, many people focus on drafting wills or setting up trusts, but one of the most overlooked aspects is how your assets are owned. The way you hold title to your assets can significantly impact whether your estate plan works as intended. Asset ownership matters in estate planning.

The Hidden Power of Asset Ownership

Ownership determines what happens to your assets if you become incapacitated or when you pass away. Asset ownership will override your will or trust, so if your assets are not owned correctly, your plan may not work as you have intended. Here’s how different forms of ownership affect your estate:

• Joint Ownership with Rights of Survivorship: If you own property jointly with someone else - such as a spouse - then upon your death, the surviving owner automatically becomes the sole owner. This transfer happens outside of probate and regardless of what your will says.
• Sole Ownership: If you own an asset in your name only, it will typically go through probate unless it has a designated beneficiary.
• Trust Ownership: When an asset is titled in the name of a trust, the successor trustee can manage or distribute it without court involvement. This is one of the key benefits of using a revocable living trust.
• Beneficiary Designations: Assets like life insurance, retirement plans, and payable-on-death (POD) bank accounts pass directly to the named beneficiaries. These designations must be reviewed regularly to ensure they align with your overall estate plan.

A Real-World Example

Consider a situation where a woman had a will leaving everything to her daughter. However, all her assets were jointly owned with her second husband. When she passed away, those assets went directly to her husband—completely bypassing the will. The daughter received nothing, despite her mother’s intentions.

This scenario underscores a critical point: your estate plan is only as effective as your asset ownership structure.

Aligning Ownership with Your Estate Plan

To ensure your estate plan works as intended, it’s essential to:

1. Review All Asset Titles: Understand how each asset is owned—individually, jointly, in trust, or with a beneficiary designation.
2. Coordinate with Your Estate Plan: Make sure ownership and beneficiary designations reflect your goals and match the instructions in your will or trust.
3. Update Regularly: Life changes - such as marriage, divorce, or the death of a loved one - can impact the effectiveness of your estate plan. Regular reviews help keep everything working properly.

How Legacy Law Group Can Help

At Legacy Law Group, we help clients throughout Northwest Ohio and Southeast Michigan create estate plans that work - plans that not only reflect your wishes and meet your needs and goals but are also structured to function effectively when needed.

When you're ready to ensure your estate plan aligns with your asset ownership, contact us today to schedule a consultation.