by Bruce L. Dorner
Ever wonder if titles are really important? We teach our young children that the neighbors should be referred to as, “Mr. or Mrs. Jones.” We know that Grandma and Grandpa have earned their titles and that if the kids refer to them as Jenny and Bob, a quick reproach is likely.
So, switching to the legal side of the equation, just how important are titles in legal documents? Have you examined the deed to your house? I’ll be that it reads, “Jim Smith and Sally Smith, husband and wife, as joint tenants with rights of survivorship.” Is this title important. You bet! These are magic words of great import. A joint tenancy with rights of survivorship is a direct instruction that upon the death of one party, the survivor owns it all. The joint tenancy passes outside of probate.
Consider an alternative method of holding title. If the words are changed just a little to read, “Jim Smith and Sally Smith, as tenants in common,” the result is different. Upon the death of one party, his or her share will flow into his or her estate and not to the survivor. Additionally, unless a joint tenancy is clearly stated, the law in New Hampshire presumes that it is intended as a tenancy in common.
Let’s take a look at titles to bank accounts, savings bonds, and the like. The same rules as stated above would apply. However, have you ever seen the designation “POD” on an account? This means that if the owner dies, the account is to be “Payable On Death” to the second named individual. I often see this designation when relatives buy bonds for young children and worry that if the child dies, at least the parent (second name) would get the proceeds upon the child’s death.
How about another title that surfaces from time to time. It’s “ITF,” which stands for “In Trust For.” This is an indication that the person creating the account or buying the bond does not intend it for him or herself, but for the second named person. In essence, it says, “I’m holding this money for the benefit of someone else.” Just remember, once you create the so-called trust, you may not be able to get the money back!
We also have Uniform Transfer to Minors laws in New Hampshire which permit funds to be held for children. You’ll see the designation “UTMA” on the accounts. Upon the child’s 21st birthday, the money belongs to the child. Sometimes this can be a good idea. Other times, giving a child access to money at the age of majority can be a real problem. Ever see a 21-year old who didn’t want the slickest sports car in the neighborhood?
For cars, do you have the title in your name alone? What would happen if you died? Would your spouse have any trouble getting the title into his or her name? This one is a bit tricky. As between husband and wife, I often suggest that the title be written as, “Bill Smith or Sally Smith.” This would allow either party to take title after the death of the other. However, New Hampshire motor vehicle law also provides an additional tool for use in a family situation.
If the car was a family purpose vehicle and Mom dies, Dad can take the title to the Division of Motor Vehicles and present that document along with a death certificate and the DMV will issue a new title in Dad’s name.
This is probably a good time to take a look at the titles shown on your important documents. There are many other variations on this theme. Be sure that the title shown will produce the end result you desire.
This article provides general information only. You should consult with your own attorney before making any legal decision.