Passing Property Via Will

Course: Investment Planning
Lesson 14: Evaluation Portfolio Performance

Student Question:

Hello – I’m a little confused about the example (below) discussing an heirloom of only sentimental value. Why would this be titled at all for a will, especially since an earlier lecture said items of no value would pass through will as the situation does not involve a contract or a new title. 

Identify the most appropriate means of titling property to meet the estate planning goal in the following situation.

A will appointment of a family heirloom to three children that has more emotional significance than monetary value. Under no circumstances does the testator wish for the asset to go outside the most immediate family.

  • Joint Tenancy with Right of Survivorship
  • Tenants by the Entirety
  • Tenants in Common (correct answer)

Thank you

Gerard


Instructor Response:

Hi Gerard,

Thank you for your question. 

Title

This can be confusing.  The word “title” refers to a group of legal rights rather than a legal document.  While all property has a “title” in this sense, not all “titles” are  by legal documents.  For example, the owner(s) of an heirloom have “title” but there may be no legal title document. For that reason, virtually any property can be owned in any number of ownership forms such as JTWROS, TBE, or TIC.  Legal rights of ownership, i.e. title, can include some or all of the following:

  • Possession 
  • Control 
  • Exclusion
  • Enjoyment
  • Disposition

Pass through the will

The will is the dispositive instrument of last resort.  If there is no state law or contract to govern disposition of the property, the will generally controls disposition. Specifically, property owned in sole name, fee simple, and fee simple absolute are disposed of in accordance with the will.  The value of an item is not relevant to this process, although it is not uncommon for items of low value to be disposed of by a separate letter of instruction to the executor rather than being listed in detail in the will itself.  For example, a father’s will might say “My gun collection is to go to my sons, to be divided by a separate letter of instruction.”

Let me know any questions!
Bruce