Four common methods of asset transfer at death are: titling, a Will, the Revocable Living Trust, and beneficiary designation.
Transfer via Titling
Assets can be titled jointly and therefore passed to the joint owner at death. Or titling can be used to make distribution post-death -- such as payable on death (POD) or transfer on death (TOD). These transfers typically happen outside of probate and relatively quickly with little or no cost.
Transfer via Will
Individually titled (owned) assets can be transferred via a valid Will. This form of transfer requires probate, with its inherent costs and delays, but is commonly used and proven through centuries of experience. The cost to draft a Will varies from less than $100 (for online and do-it-yourself versions) up to $1,000 or more, depending upon location and estate complexity.
If you desire your Will can include a statement of faith. The Will is a public record document, and this may be an appropriate tool to extend your legacy of faith.
Transfer via Revocable Living Trust
Assets titled to a Revocable Living Trust will pass to beneficiaries according to the terms of the Trust, outside the probate process. Most assets can be titled to the Trust during lifetime, including bank and investment accounts, real estate, business assets, automobiles, and personal property. It is generally not advantageous to title qualified retirement assets to a Trust.
Revocable Living Trusts can cost from a few $100 to $1,000 depending upon the assets and complexity of the estate. Like a Will, the Revocable Living Trust is a proven effective asset transfer tool.
A Revocable Living Trust has many advantages which a Will does not have, including the ability to manage assets during times of disability prior to death, the avoidance of probate delay and costs, and confidentiality.
Transfer via Beneficiary Designation
Some assets have built-in transfer planning through beneficiary designation. For example, life insurance and retirement plans allow the owner to name one or more individuals to receive the asset at death. It is also possible to name your favorite ministries as beneficiaries of these assets. Beneficiary transfers pass outside of the probate process.
Many states also allow the transfer of real estate via beneficiary deed. A beneficiary deed is tailored by state law and must be recorded to be valid. The beneficiaries named have no rights or responsibilities for the property until death of the owner (in fact, they don’t even have to know about it). Since real estate often makes up a large portion of an individual’s estate, this can be a valuable transfer tool that avoids the costs and delays of the probate process.
A Word About Coordination
However, there is a legal order – priority -- to the transfer of assets, it is crucial that Christian stewards carefully coordinate the titling and beneficiary designation of assets with other documents such as Wills and Trusts.
Bob’s Will may say he wants his bank account to pass to his grandchildren, but if his son is a joint owner of the account, it will pass by title prior to any bequest outlined in the Will. Mary may desire her house to pass to her church, but if her daughter is named on the title, that won’t likely happen. Many well-thought-out plans have been ruined by not recognizing the legal priorities of asset transfer.