As you go through the Estate Planning process, you will soon realize that your situation is not exactly the same as anybody else. And for this reason, you need to take an individualized approach to the process. Neglecting to do so could result in poor decisions that don’t match what you hope to accomplish.
Here is how we define Estate Planning:
“Estate Planning is the creation of a definite plan for managing your wealth while you’re alive and distributing it after your death. These assets may be owned by you separately or jointly with others.”
But what happens if your situation is unique? What happens if joint tenancy comes into play? Here is a the definition of joint tenancy, as shared by Cornell University Law School:
“A type of shared ownership of property, where each owner has an undivided interest in the property. This type of ownership creates a right of survivorship, which means that when one owner dies, the other owners absorb the deceased owner’s interest. For example, if A and B own a house as joint tenants, both have undivided ownership of the property, and the full right to occupy and use all of it. If A dies, B gets sole ownership of the house, because of the right of survivorship.”
As simple as this sounds, it is anything but that. There are Estate Planning details to consider, such as deciding whether or not this arrangement is best for you, your partner, and your loved ones.
Avoid Probate with Joint Tenancy
The ability to use joint tenancy to avoid probate is the primary benefit. Any property owned in joint tenancy is automatically passed to the surviving owner, without probate.
This is often the top choice when a married couple acquires property together, including but not limited to real estate, vehicles, securities, and pretty much any other type of valuable.
Other Benefits of Joint Tenancy
But the benefits do not stop there. There are other reasons to consider joint tenancy, such as follows:
- Joint tenancy is simple to create.
- It is simple for the survivor to transfer the property title to him or herself after the other owner passes on.
- It can work in your favor in regards to almost anything you own (as noted above).
- You have the option to include two or more joint tenants.
When you combine these benefits with the ability to avoid probate, it is easy to see why joint tenancy has become so popular.
Remember These Things
Although there are many benefits of joint tenancy, there are some limits to be aware of. These include but are not limited to:
- There is no way to avoid probate once the last owner passes on.
- Probate is not avoided in the unlikely circumstance that both owners die at the same time.
- The incapacity of one owner could restrict the ability of others to make key decisions regarding the property.
You need to answer this question: do the potential pitfalls of joint tenancy outweigh the benefits? In most cases, the answer is no. Even so, you need to address this question as it pertains to your particular case.
When it comes to questions of joint tenancy and Estate Planning, you don’t want to fall short in regards to knowledge. The right knowledge will ensure that you make decisions that are right for you.
If you think that joint tenancy could improve your Estate Plan, don’t hesitate to put the wheels in motion. This is something you want to complete and put behind you as soon as possible.
If you have any questions or concerns, don’t hesitate to sign up for one of our free upcoming seminars. During each seminar we discuss a variety of Estate Planning details, which includes joint tenancy. Along with this, you have the opportunity to ask questions and hear how others are focusing on this important part of their life.
We know that Estate Planning can be complex. We also know that you need help every now and again. This is why we urge you to join us in the near future. We are confident that you will learn more about the many facets of Estate Planning.
- Special Needs Planning and Direct Gifting: Take Caution - August 6, 2020
- Estate Planning With Your Spouse: Ask These Questions - August 4, 2020
- How to Know if Your Estate Plan Requires Attention - August 3, 2020