Beneficiary designations are contractual obligations or notations on titles that indicate who the property owner wants to receive that property at death.
Most forms of property today are capable of having a beneficiary designation. These take the form of "TOD" (Transfer On Death) or "POD" (Payable On Death).
The designation can also reside within a contract. For example, the beneficiary designation on life insurance or a 401(k) account is a beneficiary designation.
Real property in Ohio can also have a beneficiary designation. The property owner can place a "TOD Affidavit" in the property records indicating the desired recipient.
The biggest problem is that the beneficiary might die before the property owner. In that case, unless there's an alternate, the property no longer has a beneficiary. And in that case, the property becomes a probate asset and subject to the decedent's will or the laws of intestacy.
Another problem often results when the decedent leaves the account or property to "one" child. That person becomes the owner and doesn't have to share it with his siblings. We've seen children be very unkind to their siblings even though the parents trusted them to do the right thing to the others.
No, it's not. A co-owner has a present interest to be able to access the property and use it for his or her own benefit. With a beneficiary designation, the beneficiary only receives the property after the original owner has died.
They're a cheap way to handle estate planning. They generally don't cost money and they don't require any significant efforts to claim at death.
Most forms of property today are capable of having a beneficiary designation. These take the form of "TOD" (Transfer On Death) or "POD" (Payable On Death).
The designation can also reside within a contract. For example, the beneficiary designation on life insurance or a 401(k) account is a beneficiary designation.
Real property in Ohio can also have a beneficiary designation. The property owner can place a "TOD Affidavit" in the property records indicating the desired recipient.
What can go wrong with this?
The biggest problem is that the beneficiary might die before the property owner. In that case, unless there's an alternate, the property no longer has a beneficiary. And in that case, the property becomes a probate asset and subject to the decedent's will or the laws of intestacy.
Another problem often results when the decedent leaves the account or property to "one" child. That person becomes the owner and doesn't have to share it with his siblings. We've seen children be very unkind to their siblings even though the parents trusted them to do the right thing to the others.
Is a co-owner the same thing?
No, it's not. A co-owner has a present interest to be able to access the property and use it for his or her own benefit. With a beneficiary designation, the beneficiary only receives the property after the original owner has died.
What are the pros to beneficiary designations?
They're a cheap way to handle estate planning. They generally don't cost money and they don't require any significant efforts to claim at death.