10 Important Asset Titling Questions
At Ville Wealth Management, we believe that how you title your assets is just as important as the investments you choose or the plan you follow. Asset titling determines how your wealth is controlled, protected, and ultimately passed on to your loved ones. Done right, it can help you avoid probate, minimize taxes, and safeguard your legacy. Done wrong, it can create confusion, delays, and even legal disputes.
Highlights & Considerations
Top recommendation: Review your current asset titling and beneficiary designations.
If married, and your state permits, consider:
Tenancy by the Entirety for asset protection.
Community Property with Joint Tenancy for double step-up in basis.
Consider utilizing the following to avoid probate:
Payable on Death (POD) and Transfer on Death (TOD) designations for bank and brokerage accounts respectively.
Transfer on Death deed for your primary residence.
Transfer on Death title option for your automobiles.
Utilize trusts or custodial accounts if you have beneficiaries who are minors.
Only consider a trust as the beneficiary for retirement accounts if you have a complex estate, minor children or special needs beneficiaries; consider utilizing a “see-through” trust.
1. What assets avoid probate?
Assets with a named beneficiary: IRAs, 401(k)s, 403(b)s, Life Insurance, Deferred Compensation, etc.
Payable on Death (POD) and Transfer on Death (TOD) accounts: Bank or investment accounts that transfer to a named person upon your death.
Jointly owned assets with right of survivorship.
Assets held in a trust.
2. What are common mistakes with asset titling?
Not updating titles after big life events like marriage, divorce, births, deaths, or moving to a new state can cause significant issues. You need to review the titling carefully to ensure they are legally correct and assets go to the right people.
A common and serious problem is mismatched beneficiary forms. These forms override wills or trusts. If they’re not updated, your assets might go to people you didn’t intend, like ex-spouses or distant relatives.
Not properly funding a trust is another big mistake. If you create a trust but don’t transfer assets into it, those assets are still outside the trust and may go through probate, which the trust is meant to avoid.
Adding non-spouse individuals as joint owners, like adult children, can cause problems. It can expose your assets to their creditors or their marital issues, increasing your financial risk.
Many wrongly believe a will controls all asset distributions, but many assets pass directly based on their title or beneficiary forms. So, it’s important to review all your asset paperwork regularly.
Wrong legal descriptions in property documents can cause delays or disputes in transfers, creating costly and frustrating problems.
3. What are asset titling best practices?
Create and maintain a list of all your assets: homes, bank accounts, investments, businesses, digital assets (e.g. cryptocurrency, NFTs, rewards accounts), etc. Make sure each one is in the right name and that beneficiary details are up- to-date. This helps you manage and organize your estate.
Make sure asset titles, beneficiary forms, and estate plans like wills or trusts all align. For trust assets, retitle them to the trust and use a checklist to track changes.
Use Payable on Death (POD) designations for bank accounts and Transfer on Death (TOD) designations for investment accounts to pass assets directly to beneficiaries and avoid probate.
Be careful with joint ownership. Joint Tenancy with Right of Survivorship (JTWROS) works best for spouses. Adding others can cause tax problems, lose control, and increase creditor risks.
Use revocable living trusts for large or complex assets to avoid probate and simplify management. Make sure key assets like real estate and investments are titled in the trust’s name.
Review beneficiary designations on retirement accounts, insurance, and annuities every year to ensure they are up-to-date and match your estate plan.
Get advice from an estate attorney and tax professional to ensure your asset titles and beneficiary choices meet your goals and follow the law.
4. If you title assets properly and update beneficiary designations why do you need a will?
Assets passed by will go through the Probate Process.
A will covers any leftover or unexpected assets that are not included in a trust or assigned a beneficiary, effectively acting as a safety net to ensure these assets are distributed according to your wishes. It legally names guardians for minor children; without a will, the court decides. A will also names an executor to manage your estate, pay debts, and distribute assets. It handles personal items like jewelry and family heirlooms that don’t have titles or beneficiaries. A will can set up trusts for young or vulnerable heirs to manage assets after your death.
5. Should you name minors as beneficiaries?
It's usually best not to name a minor as a main or backup beneficiary on life insurance, retirement accounts, or other financial assets. Use a trust or custodial account instead.
Minor children can inherit an IRA but can’t manage it, so a custodian (parent/guardian) handles it until adulthood (18 or 21). For IRAs inherited from a parent, minors must take annual withdrawals based on life expectancy until age 21, then fully use the IRA within 10 years (by age 31). Many parents use a trust to manage and protect the IRA, which must be properly set up for special tax rules.
You can name a minor as a Payable on Death (POD) beneficiary on a bank account, but there are important points to consider. Most banks let you choose anyone, including a minor, as a POD beneficiary on checking, savings, or CD accounts. Usually, a court-appointed guardian or custodian (under laws like UTMA or UGMA) must manage the money until the minor turns 18 or 21, depending on the state.
6. Asset Titling for your House
If allowed in your state, Tenancy by the Entirety (TBE) is the best option for married couples to protect their home. Creditors need a judgment against both spouses to claim the property. Both spouses fully own the home together, not half each. Neither can sell or borrow against it without the other's permission.
States that recognize Tenancy by the Entirety: Alaska, Arkansas, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, Wyoming.
If Tenancy by the Entirety is not available in your state the next best option is often:
Joint Tenancy with Right of Survivorship (JTWROS). This also provides automatic survivorship but does not offer the same level of creditor protection as TBE.
Community Property with Right of Survivorship gives both spouses a full step-up in basis at the first death and avoids probate.
To transfer your home to the next generation and avoid probate you could consider setting up a Transfer on Death deed or title your home within your Revocable Living trust.
7. Asset Titling for your Automobile
In most states, you can easily transfer your car to your children or others after you die by using a Transfer on Death (TOD) or beneficiary designation on the automobile title. You remain the full owner during your lifetime, and your beneficiary automatically inherits the car upon your death, no probate required.
If your state doesn't allow TOD titling for vehicles, use a living trust or a will instead. Adding your child as a joint owner is possible but can cause issues with insurance, taxes, and liability.
States not permitting the TOD title option for vehicles: Alabama, Connecticut, Louisiana, Maine, Massachusetts, New Hampshire, Pennsylvania, Rhode Island and West Virginia.
8. Reasons to consider naming a Trust as beneficiary of your retirement accounts:
A revocable trust lets you control how, when, and to whom your retirement assets are given after you die. This helps avoid lump-sum payouts and allows you to set up regular, conditional payments to your heirs.
Protection for minor children: Since minors can’t inherit retirement accounts directly, naming a trust lets a trustee manage and use the assets for them until they are old enough.
Protecting special needs or financially irresponsible heirs: A trust can safeguard assets for disabled or special needs beneficiaries and prevent government benefits from being affected as well as stop money from being spent irresponsibly.
Blended families and complex situations: Trusts ensure children from past marriages or other family members get what you want, avoiding conflicts or giving everything to a current spouse.
Asset protection: Inherited IRAs usually offer little protection from creditors, but a well-made trust can shield assets from your beneficiaries’ creditors or divorces.
Trusts must be carefully set up as “see-through” trusts to keep tax benefits, like the 10-year withdrawal rule under the SECURE Act.
9. Reasons not to name a Trust as beneficiary of your retirement accounts:
Accelerated Taxes & Loss of Stretch: If your trust isn’t set up as a “see-through” trust, your heirs may have to withdraw the entire retirement account within 5 years instead of 10, causing higher taxes right away.
Higher Tax Rates for Trusts: Trusts hit the top federal tax rate (37% in 2025) at just $15,200 of income kept in the trust. Keeping retirement distributions in the trust can lead to much higher taxes than if the account went directly to beneficiaries.
Less Flexibility for Beneficiaries: Trust rules can limit when and how heirs access money. Restrictions that made sense when the trust was created might not fit your heirs’ needs later, potentially locking them out of funds for important expenses like education, business, or emergencies.
More Complex Administration: Trustees must follow strict rules for withdrawals and accounting, increasing legal and management costs.
Usually Not Needed: If your beneficiaries are responsible adults, naming them directly is simpler and more tax efficient. Trusts work best for minors, special needs, or spendthrift heirs.
Risk of IRS Rule Changes & Errors: IRS rules for trusts as retirement account beneficiaries are complex and can change. Mistakes in drafting or managing the trust can cause costly tax problems.
10. What are some ways to title assets to reduce taxes?
Utilize step-up in basis at death. Assets included in a decedent’s estate generally receive a step-up in basis to fair market value at death, eliminating capital gains for heirs. Avoid gifting low basis assets during life if heirs could benefit from a step-up. If a parent owns an investment account worth $500,000 and basis of $100,000 at their death, the child’s new basis is $500,000. If the child sells the investments for $500,000, there are no capital gains owed.
Placing assets in a revocable trust avoids probate, maintains privacy, provides for incapacity management and can streamline step-up in basis for beneficiaries. Assets held in a revocable trust are treated, for tax purposes, as if they are owned by the grantor.
Leverage joint ownership carefully. Assets owned jointly pass directly to the surviving owner without going through probate. In community property states, owning assets as community property with right of survivorship gives married couples a double step-up in tax basis. In other states, only the deceased spouse’s share gets a step-up.
Community Property States: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin
Plan for State-Specific Tax Rules. Some states have lower estate/inheritance tax thresholds than federal law. Twelve states have state estate tax and six levy inheritance taxes. Strategies might include giving thoughtful gifts, establishing permanent trusts to protect assets, making charitable donations, placing life insurance policies within a permanent trust, or even changing the state of your primary residence to optimize financial benefits.
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