People often share ownership of money and assets by putting someone else on an account or deed under Joint Tenancy. One of the main advantages of Joint Tenancy is that when one of the owners dies, the property will automatically go to the other owner, and there is no need for a will or probate.
But there are disadvantages you should consider before putting someone else’s name on something.
- If you have a home and have listed someone as co-owner as Joint Tenants, you will not be able to do anything with this property without his or her permission, such as sell it or get a second mortgage.
- In addition, if a creditor comes after the other owner, the creditor may have access to all or part of anything that you own jointly with that person, including your home.
- Joint Tenancy does not provide tax protection for your estate after you die.
- If the other owner were to become incapacitated, you would be unable to do anything with that property while the person is alive, unless they have planned for this ahead of time.
- If you choose to own a home in Joint Tenancy with someone other than a spouse and the relationship falls apart, this could get very sticky when it comes to dividing property. A divorce court won’t decide who gets the house, or even order it to be sold. If the other party does not want to sell his or her half, the other party does not have to. You may have to file a court action seeking a partition from the court or, if available, a court-ordered sale.
- If you make a child co-owner out of necessity, the child is under no legal obligation to be fair with your other children when it comes to dividing up assets after your death. This frequently causes family disputes which often have to be resolved by a court.
Although Joint Tenancy does have some advantages, you will want to consider the possible consequences before you agree to this type of ownership.