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Generally speaking, owning property jointly benefits an estate plan. Indeed, joint ownership offers several advantages for surviving family members. However, there are exceptions and it\u2019s not the solution for all estate planning problems.<\/p>\n
2 types of joint ownership for spouses<\/strong><\/p>\n As the name implies, joint ownership requires interests in property by more than one party. The type of joint ownership depends on the wording of the title to the property.<\/p>\n From a legal standpoint, there may be two main options for married couples:<\/p>\n Property may also be owned as a \u201ctenancy in common.\u201d With this form of ownership, each party has a separate transferable right to the property. Generally, this would apply to co-owners who aren\u2019t married to each other, though in certain situations married couples may opt to be tenants in common.<\/p>\n Joint ownership plusses and minuses<\/strong><\/p>\n The main estate planning attraction of joint ownership is that the property avoids probate. Probate is the process, based on prevailing state law, whereby a deceased person\u2019s assets are legally transferred to the beneficiaries. Depending on the state, it may be time-consuming or costly \u2014 or both \u2014 as well as being intrusive. Jointly owned property, however, simply passes to the surviving owner.<\/p>\n Joint ownership is a convenient and inexpensive way to establish ownership rights. But the long-standing legal concept has its drawbacks, too. Some disadvantages of joint ownership relate to potential liability for federal gift and estate tax. Comparable rules may also apply on the state level.<\/p>\n For starters, if parties other than a married couple create joint ownership, it generally triggers a taxable gift, unless each one contributed property to obtain a share of the title. However, for a property interest in securities or a financial account, there\u2019s no taxable gift until the other person actually makes a withdrawal.<\/p>\n Lessons to be learned<\/strong><\/p>\n Joint ownership can be a valuable estate planning tool, especially because it avoids probate. However, this technique shouldn\u2019t be considered a replacement for a will. We can help you coordinate joint ownership with other aspects of your estate plan.<\/p>\n \u00a9 2023<\/em><\/p>\n <\/body> Generally speaking, owning property jointly benefits an estate plan. Indeed, joint ownership offers several advantages for surviving family members. However, there are exceptions and it\u2019s not the solution for all estate planning problems. 2 types of joint ownership for spouses As the name implies, joint ownership requires interests in property by more than one party. […]<\/p>\n\n
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