By\u00a0Keith L. Davis, Esq.<\/p>\n
Occasionally, clients ask about placing assets in joint tenancy with the right of survivorship (JTWROS) as means to allow loved ones to assist in managing assets during disability or as an estate planning device \u2013 more particularly to avoid the probate process.\u00a0 Often using JTWROS is a mistake.<\/p>\n
When planning to manage an account during disability, it is usually preferable to: 1) add an account signor (but not co-owner), 2) use a financial power of attorney, or 3) use a revocable trust.\u00a0 Often when a co-joint tenant is added, the parent names one child with the parent\u2019s assets being left equally by will or trust to all of the children.\u00a0 Since the joint tenancy overrides the will or trust, a different distribution than intended occurs and hard feelings among beneficiaries often result.<\/p>\n
If the property being considered for JTWROS has appreciated since its acquisition, the Transferee may suffer higher taxes upon future sale of the property.\u00a0 This is because, upon transfer of the one-half interest by gift, the Transferee receives one-half of the Transferor\u2019s lower cost basis rather than one-half of the higher appreciated value.\u00a0 Whereas, if the property interest were transferred at death, the Transferee would receive a higher \u201cstepped up\u201d basis thus allowing him or her to sell the property in the future at less gain for tax purposes.<\/p>\n
Two additional concerns with gift transfers involve creditors and \u201cpredators\u201d and government benefits.\u00a0 Should you transfer a property interest to your child, your property may be subject to creditor\u2019s claims against your child including claims by their divorcing spouses (\u201cpredators\u201d).\u00a0 Additionally, transfers by gift may subject you to loss of needs-based government benefits.<\/p>\n
For these and other reasons, competent counsel should be consulted prior to transferring property to joint ownership.\u00a0 Our attorneys are available to assist in analyzing the best course of action.<\/p>\n
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By\u00a0Keith L. Davis, Esq. Occasionally, clients ask about placing assets in joint tenancy with the right of survivorship (JTWROS) as means to allow loved ones to assist in managing assets […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"yoast_head":"\n