The Issue

Many persons own assets with someone else. Such assets may include their home, land, cars, bank accounts, stocks, bonds, credit union accounts or any other kinds of property. Safe deposit boxes often have more than one name listed as owner. When such assets are owned by two or more persons as “Joint Tenants with a Right of Survivorship,” “Joint Tenants,” “JTWROS,” or simply have the word “or” between their names, some very specific legal rules apply. The most important is that on the death of one joint tenant, the survivor becomes the sole owner of the property REGARDLESS of what the parties intended or what the decedent’s estate planning documents provide. Therefore it is important that you understand the implications of these rules. Often, persons will place some or all of their assets in joint tenancy in the belief that this is the best or only way to allow either named person to be a signer on the account. Parents will often do this to permit a son or daughter to take over management of assets if the parent becomes too disabled to do so himself, but not necessarily with the intent to make them the ultimate owner of the property. The use of joint tenancies is also used as a technique to avoid probate since the surviving joint tenant automatically owns the assets at the death of the other. While such an ownership arrangement does have benefits, there are drawbacks as well.

Where to go for help

People often receive conflicting advice about joint ownership of assets. Bank personnel may recommend it for the convenience of multiple signers on the account. Real estate sellers may suggest it as a way of avoiding probate. Stock brokers or other financial advisers may advise you that it makes transfers “simpler.” Because joint tenancy has important legal implications, your best adviser is your attorney, who is familiar with all of the ways in which assets may be held. The attorney will need to completely review your assets and your desires for their transfer on your death. The attorney will also be able to advise you as to other techniques that may be available to assure continued management of your assets in the event of disability. Such options may include durable powers of attorney or the use of trusts. The attorney, perhaps in concert with your accountant

or tax adviser, can suggest a complete plan that protects your interests, carries out your wishes and saves substantial expense. This clearly is an area where you should not rely upon advice of persons not fully aware of your situation, needs, desires and assets, and not fully aware of the law. No matter how well-intentioned, improper advice can be very costly indeed.