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My wife and I have a joint taxable brokerage account. Had it over 30 years but we are now 78+76. Any good reason to keep or change ownership? We have a checking account there and a few equities. I believe if one of us passes away the other is the beneficiary and 1/2 of the account has stepped up basis on the equities.
Talk to your estate planning attorney. If you haven't updated your wills and other documents for awhile, it's time. Our attorney recommended we hold most large assets as tenants in common (that is, without right of survivorship), so that whichever one of us dies first, their trust will be fully funded. Without a trust, the first death results in all of that person's assets going to the survivor, then the second death results in only their "exemption-equivalent amount" going to children, and the first person's exemption-equivalent amount has been lost. Caveat - I'm not an attorney; just passing along what I know from my estate planning. Good luck.
Depends on size of assets, what you're trying to accomplish, where you live. There's no single correct answer.
If you live in a community property state, you would likely want to retitle as community property - that way the entire account gets a step up (or step down - that's the downside) at death. Generally speaking, right of survivorship exists for community property only if a person dies without a will (intestate); the will trumps community property at death. (Note: C/P laws vary by state, you should check your own state). Curiously, the current trend is diametrically opposed to the advice given by the posters above - C/P states have started adopting C/P WROS, meaning that the transfer of assets is automatic, like JTWROS; the will no longer trumps.
If you don't have enough assets to make your estate subject to estate tax (note that this too is affected by which state you live in), then a bypass trust (which can be testamentary trusts, i.e. created by will, see section B here) seems like a waste of time and money.
Even if you have enough assets, at least for now at the Federal level, there's no estate tax benefit in a bypass trust, due to portability of the estate tax exemption (technically, credit). Here's Nolo's writeup on the topic in general. As they note, the law could change again, but that's always true, and why one should keep up with the current law and keep one's wills and investments structured accordingly.
One of the problems with property that does not pass automatically ("by operation of law", e.g. JTWROS) is that the property will be probated. In most states, that's not as big a deal as people make it out to be, but in a few it is. (So here too, where you live matters.) In California, if you leave your share of C/P to your spouse via your will, it does not get probated, but in other C/P states, it might.
Finally, if you're concerned about creditors, you might want to go in the completely opposite direction - separate property.
I appreciate all your comments. You all know your stuff. very impressed. I am in Ohio, not a community state. We do have a will and a modest amount of assets. We both have IRA's both Roth and Traditional. We do not have a trust. We believed with size our estate a will is all we needed. Our home, fully owned is also jointly owned.
Comments
Regards,
Ted
If you live in a community property state, you would likely want to retitle as community property - that way the entire account gets a step up (or step down - that's the downside) at death. Generally speaking, right of survivorship exists for community property only if a person dies without a will (intestate); the will trumps community property at death. (Note: C/P laws vary by state, you should check your own state). Curiously, the current trend is diametrically opposed to the advice given by the posters above - C/P states have started adopting C/P WROS, meaning that the transfer of assets is automatic, like JTWROS; the will no longer trumps.
If you don't have enough assets to make your estate subject to estate tax (note that this too is affected by which state you live in), then a bypass trust (which can be testamentary trusts, i.e. created by will, see section B here) seems like a waste of time and money.
Even if you have enough assets, at least for now at the Federal level, there's no estate tax benefit in a bypass trust, due to portability of the estate tax exemption (technically, credit). Here's Nolo's writeup on the topic in general. As they note, the law could change again, but that's always true, and why one should keep up with the current law and keep one's wills and investments structured accordingly.
One of the problems with property that does not pass automatically ("by operation of law", e.g. JTWROS) is that the property will be probated. In most states, that's not as big a deal as people make it out to be, but in a few it is. (So here too, where you live matters.) In California, if you leave your share of C/P to your spouse via your will, it does not get probated, but in other C/P states, it might.
Finally, if you're concerned about creditors, you might want to go in the completely opposite direction - separate property.
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