Flexibility and Living Trusts
I was recently reminded of another reason I prefer passing on most assets via a living trust rather than via joint tenancy or beneficiary designations. I met with a client who has maybe 20 different assets, 10 in her living trust and 10 in joint tenancy with her son or with her son as beneficiary. This will work fine so long as she predeceases her son (which is what's to be expected), but what if she doesn't? In that case, upon her son's death, she will become the sole owner of the joint tenancy property (which will require a probate at her death), and there will be no valid beneficiary on her beneficiary designation accounts (so they might also be subject to probate, depending on the default provision in the designation). By contrast, a living trust could be drafted flexibly, with provisions that apply if the son happens to predecease the client.
