The Clinical Guide to Supportive and Palliative Care for HIV/AIDS

A Clinical Guide to Supportive and Palliative Care for HIV/AIDS • Chapter 18: Legal and Financial Issuesbeneficiary of the account is similar to the beneficiary of a life insurance or retirementpolicy. She has no access to the funds in the account during the principal account holder’slifetime, but the proceeds of the account avoid probate and become immediately availableto the beneficiary upon the death of the account holder.■ Life Insurance and Pension PlansProceeds of life insurance and pension plans that pay out to a named beneficiary after aperson’s death are nonprobate assets. The key here is to make sure that a beneficiaryhas been named. Most plans and policies will allow the policyholder to name more thanone beneficiary. For example, a person living with HIV might designate her life partnerand her two children as the beneficiaries of her life insurance policy. Some policies willallow the policyholder to specify the shares allotted to each beneficiary (i.e., 50% tospouse and 25% each to two children). An important part of estate planning is periodicallychecking to make sure that the company holding the policy has the correct informationregarding intended beneficiaries. If there are no beneficiaries named, or if the beneficiarynamed predeceases the policyholder, the ability to control who receives the asset may belost. Without a beneficiary named, many benefit plans will automatically distribute theproceeds to the policyholder’s next of kin, or distribute the proceeds to the policyholder’sestate to be accounted for and distributed along with the other probate assets.■ Forms of Real Property OwnershipIf a person living with HIV owns real property with another person, it makes sense toexamine the deed to determine the form of ownership. There are two forms of real propertyco-ownership that avoid probate and allow the property to pass automatically to thesurvivor upon death of the co-owner. The first form of co-ownership is “tenancy by theentirety” and is only available to legally married couples. Property owned as a tenancy bythe entirety is often the best possible option for married couples because not only does itavoid probate and allow the property to automatically pass to the surviving spouse, but italso avoids taxation upon the death of one spouse (that is, the surviving spouse is nottaxed on the inheritance because she already owned the “entirety”).For unmarried partners and other co-owners who prefer automatic passage of the propertyto the other co-owner upon death, the best available tool is owning property jointly “withrights of survivorship.” Under this form of ownership, the title to the property automaticallypasses to the survivor upon the death of the joint owner. Property that is held jointly withthe right of survivorship allows the surviving owner to sell the property immediately withoutseeking court approval in probate after the co-owner’s death. In addition, jointly heldproperty does not bear the risk of a challenge that accompanies the probate of a will.Thus, joint ownership with rights of survivorship is an excellent estate planning tool.It is critically important to be aware that if two unmarried people jointly own propertytogether and the deed does not specifically refer to rights of survivorship, a tenancy incommon will be presumed. With a tenancy in common, the co-owner does not inherit theproperty upon the death of the other owner. This may be an appropriate form of ownershipfor co-owners who do not intend to have the other co-owner inherit upon their death, andwho might prefer that their half of the property be distributed to other friends or familymembers in accordance with the terms of their will.380U.S. Department of Health and Human Services • Health Resources and Services Administration • HIV/AIDS Bureau