There are numerous different ways that you can arrange for assets to fall into the hands of your loved ones after you pass away. You should certainly explore your options and make intelligent, informed decisions. The optimal course of action is going to depend upon the specific nature of your estate and your family dynamic.
You may have heard about joint tenancy as a potential estate planning solution. When you first hear about it, you may think that you do not need to look any further. In fact, when you dig beneath the surface, there are some drawbacks to consider when it comes to joint tenancy. Let’s look at the details.
Joint Tenancy With Right of Survivorship
Let’s say that you own a home. If you maintained full ownership of the property and you left the home to your daughter in your last will, the transfer would be subject to the process of probate. Probate is a legal process that can be time-consuming and expensive.
Joint tenancy is co-ownership of property. You could make your daughter a joint tenant, and she would own half of the home. There would be no need to leave it to her in your last will, because she would automatically assume ownership of the entirety of the property through right of survivorship. This transfer would not be subject to probate, so it would take place in a timely manner.
This can sound like a great solution, but there are some downsides to consider. If you make your daughter a joint tenant, she assumes legal ownership of half of the property right away. As result, you would need her permission if you ever wanted to sell the property.
In addition, any financial difficulties that your daughter may run into would impact you. If she was the subject of a lawsuit, her portion of the property could be attached. Tax liens could be placed on the property, and her portion of the property could be in play during divorce proceedings.
There is also the matter of potential disinheritances. You could instruct the joint tenant to sell the home after your passing and distribute the proceeds among multiple different family members. There is nothing legally compelling the joint tenant to follow these instructions.
If your objective is to facilitate asset transfers outside of probate, there are other ways of accomplishing this objective that may be safer in the long run.
Free Special Report on Joint Tenancy
We have prepared a free special report on joint tenancy. If you would like to obtain more in-depth information, click this link: Report on Joint Tenancy.
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