Property Titling And Transfer - Answer Key
Sam's gross estate will increase by $225,000 from these assets ($50K + $75K + $100K). The joint CD will now be owned 100% by his wife. The life insurance proceeds will go to his wife free of gift and federal income tax.
Tenancy by the entirety and community property are property arrangements between spouses only.
Community property is a property agreement between spouses and does not avoid probate. Assets purchased with community property funds are considered community property.
Tenants in common are free to transfer their respective shares of the property to other individuals.
Traditional IRA accounts pass by "contract" which means whoever is named as the beneficiary on the account will receive the assets. Beneficiary designations take precedence over trust and will declarations.
Individual accounts and tenancy in common property ownership will both be probated at the death of the owner. TOD (transfer-on-death) and POD (payable-on-death) are both effective beneficiary assignment strategies used to avoid probate. Revocable trusts will also avoid probate, even though these assets are generally included in the gross estate of the grantor.
7. A Death without a will is known as "intestate."
Some might consider creditor notification as another disadvantage; however, it is not. It sets a statute of limitations for creditors to come forward to file their claims. This prevents creditor issues in the future on the decedent's property.
Annuity contracts and life insurance both pass by contract and avoid the probate process.