…have questions and concerns about Joint Ownership of property and accounts in their estate plans.
In joint ownership, two or more persons share an undivided fractional ownership in property with rights of survivorship. This mechanism is effective for avoiding probate, because the property passes automatically upon the death of one joint owner to the surviving owner or owners unless the client specifies in his or her will that joint accounts created merely for convenience shall be included in the disposition of the estate.
In the case of bank accounts, joint ownership may be a convenient way to delegate to another person the responsibility to make deposits, withdrawals or payments for the incapacitated client.
However, there are major drawbacks to joint ownership:
- One joint tenant cannot sell jointly held assets without the consent of the other
- No fiduciary relationship imposes duties regarding the incompetent joint owner on the competent joint tenant.
- The incompetent joint tenant lacks power to change survivorship to a different person.
- There may be gift-tax consequences resulting from the creation of a joint tenancy.
- The joint tenant whose title is merely for convenience may still be at risk of having the property attached by creditors or claimed by a divorcing spouse.
- The joint tenant (e.g., the client’s adult child) may predecease the client or become incompetent, in which case the original intention to have the joint tenant use the property for the client’s benefit will be thwarted.
Attorney John Polgrean consults regularly with individuals and families in Nashua and from all Southern New Hampshire on estate planning matters including elder law issues confronting families with aging loved ones. Please contact John at (603) 883-0797 to set up a consultation if you or someone you know has questions/concerns in this area.
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.