Joint ownership for a husband and wife is usually recommended. Yes, it
will usually avoid probate, especially for spouses. In most cases, it will
immediately transfer the property to the surviving spouse.
Where the problem usually occurs is when there is joint ownership
between a parent and child or other person. Yes, it may avoid probate, but
you have actually given up control and have possibly opened up the
property to someone else’s liability or legal action!
There is something called “Unintentional Disinheriting.” This
is when you may have been married before, and now your second spouses name
is on the deed. You wanted the family home to go to the kids, but the
spouse now has 100% rights to it and your children may never see it...you
have unintentionally disinherited your children. This also includes other
assets such as bank accounts, accounts with beneficiaries like 401-k’s,
IRA’s, Brokerage accounts, Stocks, and more! This is only one scenario
that this may occur….there are many more!
The chance of a Potential Law Suit is on the rise. With just
your name on the deed or title, you are the only one that could be liable
to a law suit. When someone else’s name is on the deed or title, “joint
ownership,” you are now exposing that asset to their chance of a law
suit! And for every other person on that deed or title, there is a greater
chance of having the asset exposed to loss.
You can really end up in a mess if your joint owner becomes mentally
or physically incapacitated (or worse yet die), and can no longer sign
their name, especially if real estate is involved. You will have to get
approval from the probate court (living probate), pay the appropriate fees
for the lawyer and courts service before you can sell or refinance the
jointly owned property.
This is only a couple reasons joint ownership may not be the right
choice for your estate plan. Sometimes taking an easy way out doesn’t
work……..
