When writing a last will and testament, if you are married or in a domestic partnership, you may wonder what property is "yours" to give to beneficiaries. Property ownership is confusing, especially if you are married or in a community property state.
Property Distributed by a Last Will and Testament
First, you should know what you can and can't give away in your will. A will distributes certain types of property but not all.
For example, you can give away your coin collection or give money to a beneficiary. However, other types of property, such as a bank account with a beneficiary designation, are given directly to the beneficiary at the grantor's death. Therefore, it is not necessary to list that bank account in your will.
Property Given in a Will:
- Cash (i.e., a gift of money)
- Cars, boats, and other recreational vehicles
- Antiques, artwork, and jewelry
- Precious metals like coin collections
- Household Possessions
- Real estate like buildings or land
Property Not Given in a Will:
- Bank accounts with TOD (transfer-on-death) beneficiaries
- Insurance policies with named beneficiaries
- Proceeds from retirement plans or pensions
- Stocks, bonds, or financial investments with named beneficiaries
- Assets held in a separate trust instrument
So now you know what property you can give away in your will, but do you own it? You can only give away what you own.
What Is Your Property?
Generally, all property solely owned by you or titled in your name only is the property you can give away. However, you may have partial ownership of a property, so property titles matter when making a will.
Types of Property Titles
Tenancy in the Entirety
If you owned your home with your spouse, you might have ownership with tenancy in the entirety. Tenancy in the entirety means both of you own the property, and the surviving spouse automatically gets the home when the first spouse dies. Only married couples can own property as a tenancy in the entirety.
Joint Tenancy with Right of Survivorship
If you own a property with someone with joint tenancy with the right of survivorship, that person will automatically receive the property when you die. So, if you and your brother owned a piece of land with joint tenancy with the right of survivorship, your brother will own the entire property if you die.
Tenants in Common
You may own a property with another person as tenants in common. As tenants in common, each owner has a certain percentage of the property. They can do whatever they want with that percentage, such as sell it or give it away. For example, if you own a property 50-50 with your brother and you die, your 50% stake in that property goes to your estate.
Therefore, you can give property owned by you alone or your portion of property held as tenants in common in a will. But if you live in a community property state, there is a difference between separate property and marital property and what you can give away.
Community Property States
A community property state considers any property acquired during the marriage is owned 50-50 by the spouses. Those states that recognize community property are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In a common-law state, you own property that you paid for with your income or property or if the property is legally titled in your name only.
Separate Property v. Marital Property
Marital property is assets and income acquired during the marriage. Separate or non-marital property is property owned by you before or after your marriage.
Types of Separate Property:
- Property or assets titled only in your name
- Property or assets owned before marriage
- Property or assets acquired after a permanent separation
- Non-marital property owned and kept separate before the marriage.
- Gifts or an inheritance only given to you and kept separately from marital assets
So in a common-law state, you can leave your separate property and one-half of your marital property in your will.
If you have simple wishes regarding your property distribution, such as "all your property to your spouse, and then children," then using an online will service may meet your needs. However, if you own property with several people, you may want to contact a local estate planning attorney for help.
Related Resources:
- What Not To Include When Making a Will (FindLaw's Learn About the Law)
- COVID-19 Is Making Young Adults Think About Estate Planning (FindLaw's Law and Daily Life)
- How To Leave Money to Beneficiaries Who Can't Manage It (FindLaw's Law and Daily Life)
- Deciding Between an Attorney or Online Forms for Estate Planning (FindLaw's Law and Daily Life)
