Methods Of Property Transfer At Death
Estate planning involves transfer of ownership at life and death. This section will focus on the transfer at death. There are four primary ways to transfer property ownership at death.

1) Transfers through the probate process (provisions in your will)
2) Transfers by operation of law
3) Transfers through trusts
4) Transfers by contract

1. Transfers Through Probate Process
Most people know that the probate process can be costly, time consuming and contend that it provides little or no benefit. And most proponents of the probate process argue that it prevents fraud in transferring ownership and protects inheritors from claims against the decedent's property.

The probate process consists of:
· Filing a will with the local probate or surrogate court
· Taking inventory of the decedent's property
· Pay off debts and/or creditors if any (including any estate tax owed)
· Distributing the property at the direction of the will

The reality is the probate functions are administrative and clerical. It is also important to know that all property the decedent owned, or had an interest in, may not pass through his or her will. Only probate assets pass through wills.

Assets subject to probate include: · Singly owned assets
· Contracted proceeds which are payable to the estate
· Property held by tenancy in common
·
Assets where the beneficiary is "estate of the insured"
· Community property (50% attributable to each spouse)

Non-probate assets include everything else.

Please see below "Intestate Succession" for decedents with no will, but keep in mind the estate must still go through probate.

Testamentary Distribution
Testamentary distribution is the process in which the decedent leaves an outright bequest of personal property or real property through a will. The three types of bequests are:

· Specific bequest – A specific bequest is when you leave a specific individual or organization a specific item or certain dollar amount and describe the source. An example would be: "I leave my Harley Davidson to my grandson, Heath."
· General bequest – A general bequest is not specific in nature and gives the executor flexibility to honor the bequest. An example would be "I leave $30,000 to my daughter, Julie."
· Residuary bequest – A residuary bequest is made after all other bequests have been made and all debts paid to creditors. An example might be "I leave the remainder of my personal and real assets to the Animal Kingdom Sanctuary."

Intestate Succession
Although most people should think ahead and create a will in order to ensure that, after their death, their wishes are carried out. Not everyone makes full preparations for what will happen to their property when they die. A person who dies without a will is said to have died "intestate." If a person dies in intestate, state law may dictate how the property is distributed.

Intestacy laws vary from state to state and a person's property is distributed according to the laws of the state in which he or she died. However, if the person owned property in a different state, the property may be distributed according to that state's laws instead. Please note that each state has its own laws on who inherits property in the absence of a will.



Operation of Law, Transfers Through Trusts, Transfers by Contract

Related Articles
  1. Investing

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  2. Retirement

    Avoid These 4 Common Causes of Family Estate Fights

    Sibling battles over their parents' belongings are quite common. But open family discussions before the parent dies can often prevent them.
  3. Retirement

    3 Secrets You Didn't Know About Estate Planning

    Three estate planning secrets every advisor and saver needs to know.
  4. Personal Finance

    State Laws Dictate Division Of Joint Property

    In breakup, divorce or death, community or common law will determine how property is divided.
  5. Investing

    The Benefits And Pitfalls Of Joint Tenancy

    This arrangement allows beneficiaries to access your account without having to go to court.
  6. Financial Advisor

    Leaving Inheritance To Children Easier Said Than Done

    Consider your own retirement needs when deciding whether to leave an inheritance.
  7. Managing Wealth

    Don't Count On An Inheritance

    If you're fortunate enough to receive an inheritance at all, it might not be nearly as large as you expect.
  8. Managing Wealth

    How To Choose The Right Executor For Your Estate

    Making a careful choice now can save your heirs from a lot of problems later.
  9. Financial Advisor

    Are The Wealthy Better Served By Trusts Or Wills?

    Trusts and wills are both means to pass on wealth to heirs. Which of these is likely to serve your needs better if you have considerable wealth?
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center