Q: Besides not having a Will or being involved in a faulty living trust, what is the next biggest problem that you see with people's estate planning?

A: Without a doubt, proper property ownership is an issue in almost every estate plan. For a couple, unless there is a personal or business reason not to do so, everything should be held in joint tenancy or each should be named the other's beneficiary or payable-on-death designee. Thus even though "probate" in Colorado is an easy, inexpensive, quick, and efficient settlement tool, "probate" will only be needed at the second death using joint tenancy.

But be careful. Something can have both names on a document and not be in joint tenancy but be held in tenants in common. What's the difference?

Joint tenancy means that title will automatically go to the other person on title. Of course, some paperwork is required such as recording a death certificate or submitting forms to clear title, but involvement of the Court is not necessary.

Tenants in Common means that each person owns his or her undivided share of the assets but at death the deceased's share will pass under the Will or by intestate laws (no Will). Thus title may not go to the other title holder unless that person is a beneficiary under the Will or an heir next in line to inherit.

Sometimes it is hard to tell how title is held between owners. If nothing is indicated, title is tenants in common. But if the words joint tenancy or joint tenancy with right of survivorship are present, or the letters "JTWROS" or the word "or" appears, then title is held in joint tenancy. The word "and" normally means tenants in common.

But be careful especially when dealing with bank related assets. Nothing can appear but the bank treats the account or asset as joint tenancy anyway. So often it is necessary to ask the entity to clarify what is noted or not noted. And remember your attorney can also help.

For single persons, holding assets in joint tenancy, even with children, is not recommended. But the next column will touch on the reason for avoiding this practice.

An exception to the rule of always holding everything in joint tenancy relates to tax planning and Tax Wills. For a couple, the engine that triggers the tax avoidance at the second death is that at the first death the deceased's Will shifts assets into the testamentary trust (or B trust) of the Will. If all the assets are in joint tenancy, that takes priority over the Will and the Will has nothing to shift into the trust. Only assets held in the deceased's name or the deceased's share of the tenants-in-common property can be shifted into the trust by the Will.

In like manner, if an asset is set up in joint tenancy but the Will directs the asset to another person, the joint tenancy prevails and the beneficiary under the Will does not receive that asset. Thus beneficiary designations and joint tenancy or tenants in common acts as the foundation of a person's plan and supports the Wills.

Finally if you have a living trust, be certain that all of the assets are properly titled in the trust. Assets outside the trust not held in joint tenancy that are either real property or worth more than $27,000 will have to go through probate even with a Pour-over Will, thus defeating the reason for doing the trust.

If real property is supposed to be in the trust, the deed should be recorded. Holding a deed and then recording it after death is not a proper probate avoidance tool (if you wish, I can do a whole column why) and just listing items on the trust inventory without transferring titles won't work either. Finally, advisors that do one living trust for clients seem to like doing successive trusts but often title is not transferred from the original living trust to the new one. Any one of these problems, and many others, related to property ownership and a living trust will trigger that probate, which is what was sought to avoid in the first place.

I am out of space so I need to stop. But I hope you have an idea why property ownership is so important.