The pitfalls of jointly owned property are horrendous. It is likely that the best way to own your property is in your revocable living trust; but, consult with a qualified estate planning attorney to be sure. There are times when tenancy by the entirties property may be worth the perils as long as you consider the costs and benefits when planning.
If you own property jointly with your spouse, the property will go to your spouse outright immediately, and by operation of law, upon your death.
On the surface, this may seem like a good thing. However, if your spouse is not the parent of all of your children, your children may be disinherited.
And, if the property goes outright to your spouse, it has no creditor protection so it can be taken in a subsequent divorce, bankruptcy, business failure, medical crisis, car accident, or slip and fall law suit. If the property is owned in trust and passes in asset protection trusts, it can’t be seized by creditors.
Moreover, when you own property jointly, you are usually subject to the creditors of your joint owner. So, if you put your child’s name on your bank accounts for “ease,” they can be taken from you if your child goes through a divorce or has creditor issues.
The property is also subject to your joint owner’s whims. All the money can be taken out of your account, you maybe forced to sell your house, or your joint owner (and all 5 of his teenage children) may move in.
You may disinherit your other children. If you put one child’s name on an account as a joint owner, that child will own that account when you die. Your other children will receive nothing of that account because it was jointly owned property.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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