Preparing estate-planning documents to ensure assets are set to be passed on to intended beneficiaries is the main goal of most estate-planning strategies for married people. However, after one has drafted a will and created trusts, there are still other aspects that should be considered when planning for estate administration in Maryland or in any other state. Married people should also remember to coordinate account titling with beneficiary designations.
Failure to take this into consideration can result in consequences that undermine the goals of one’s estate plans. Married couples commonly choose to title their accounts as joint tenants with right of survivorship (JTWROS) as a default titling option. This type of account titling passes assets in the account to a surviving account holder in the case that the other account holder dies. Many times, married couples choose JTWROS accounts when they have simple estates that do not reach current estate tax limits.
However, one thing a married couple should know about is that JTWROS titling usually supersedes a will. This means that the account assets will not be passed to intended beneficiaries specified in accordance with the decedent’s will. The joint account owner is presumed to maintain full ownership of the assets held in the account. Therefore, the decedent’s estate may be liable for estate taxation if the joint account holder is not the decedent’s spouse.
On the other hand, whether or not using JTWROS accounts is right for a married couple will depend on specific details of the situation in Maryland or in any other state. Each person has varying estate administration goals. Therefore, an individualized approach to estate-planning strategies will provide the best outcome.
Source: wealthmanagement.com, “Proper Account Titling and Beneficiary Designations“, Rosanne Auslander, Sept. 29, 2014