How "Title" Can Ruin Your Day! 

A recent study indicates that most Americans over the age of 55 have less than $25,000 in savings. For some, any inheritance they may receive is critical to their future.

While the largest asset you can pass to your heirs is usually your home, something called "title" can ruin things for everyone. Many don't appreciate the importance of title.

Here are some examples based on actual clients. The names have been changed.

1) Cheryl is 54 years old. She doesn't have much of a nest egg and she hopes her inheritance would help her during her retirement.

Cheryl's father died without a will or trust. She was one of three children and, unfortunately, a bit estranged from her only brother. Her dad's home was worth $900,000. Cheryl called her brother to discuss when the house would be sold. She learned that prior to their father's death, her brother was made joint tenant on the house.  He became sole owner of the property and he didn't really feel like sharing.

2) Sharon lost her husband years ago to illness. They had five grown children and 10 grandchildren. She later fell in love with Kyle and put Kyle on title to her home as a "tenant in common." Her broker recommended that to her and she didn't think twice. Kyle had kids of his own from his first marriage. Kyle passed away in a car accident without a will or a trust and now his kids want the home. I explained that since Kyle was a "tenant in common," his interest passes to his kids. Sharon's children were not too happy about that. Now Sharon owns the home with Kyle's children from the previous marriage.

3) Kevin and Beverly were married for many years and had two children.  When Kevin died, Beverly became sole owner of their house because it was in joint tenancy (like most couples). Beverly later married James, and put him on title as joint tenant. They heard that joint tenancy was the best way to own property and other assets. About one year later, she died from a battle with cancer and James became the sole owner of the house. When James died years later, he gave the house to his children from a prior relationship.  Beverly's children got nothing.

Some experts note that wealthy families remain wealthy because they know how to keep their money in the family. In this age when many savings accounts are slim to none, it would be nice to make sure your major asset (your home) gets to the right people.