CONTRIBUTED CONTENT — Protecting your family’s financial future after your death requires a secure trust, will and other important legal documents. Over the last 19 years, the attorneys at Brindley Sullivan have helped thousands of Southern Utah clients safeguard their assets and avoid the hassle of probate.
As aging adults start to think about how they’d like their money and property to be distributed once they’re gone, they might also be looking for “easier” and more affordable alternatives to estate planning. Often, they’ll consider adding their children’s names to their bank account and even the deed to their home. However, this isn’t advisable for a few reasons.
“That’s a question we get a lot, and my answer is absolutely not. Don’t do it,” Brindley Sullivan estate planning attorney Andrew S. McCullough said. “It creates a lot of risk for you.”
When you add one or more of your children to your home and/or your bank account, those children receive an ownership interest in your assets under the law. If they were to go through a divorce, bankruptcy, lawsuit or debt collection, creditors could target your money and property to settle their claims.
Creditors may even go so far as to seize your home. Depending on the extent of your children’s debts, you could be left with nothing.
Once a child’s name is on the deed to your home, you can only rent, sell or refinance it if your child(ren) cooperate with you and sign the necessary paperwork. Essentially, you will have surrendered control of your property unless your heirs approve of what you want to do with it.
Children could also misuse the money in your bank account once they receive joint ownership. You may end up needing these funds for medical care during your lifetime, or perhaps you have a plan for how they should be divided after your death.
If you have multiple heirs but only add the name of one child to your assets, ownership of those assets will transfer to that child upon your death. Legally, that child has no obligation to share the inheritance with their siblings. And when they do, it opens the door for cumbersome gift taxes to be levied against the person responsible for distributing the funds.
Although the state of Utah doesn’t have a gift tax, federal law requires individuals to report any monetary gift exceeding $17,000 to the IRS. The donor is usually responsible for paying all gift taxes, and gifts aren’t tax-deductible.
“Typically, using a will or trust prevents all of these issues,” McCullough said. “We can design it so your assets go to the individuals you want to receive them when you pass away, avoiding the lengthy and expensive process of probate.”
An estate plan from Brindley Sullivan always includes power of attorney documents as well. During an emergency, such as a medical episode that renders you incapacitated, a power of attorney allows your child to access your funds and act on your behalf. However, it doesn’t expose your money to their potential creditors.
Brent Brindley and M. Sean Sullivan left regional law offices in 2004 to start their own practice, Brindley Sullivan. The firm focuses on wills, trusts, probate, guardianships, conservatorships, asset protection, business succession, fiduciary duties, rights, beneficiary rights and charitable giving.
The attorneys at Brindley Sullivan are here to provide trusted help when you need it most. Protect your hard-earned money, preserve family relationships and control probate challenges with legal documents designed to carry out your intentions after you pass away.
Schedule your free estate and asset planning consultation today at BrindleySullivan.com.
Written by ALEXA MORGAN for St. George News.
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