Why Joint Ownership Shouldn’t Be Your Go-To Plan as Newlyweds
When you get married, combining assets often seems like a natural step. Adding your spouse to your bank accounts or property titles as joint tenants with rights of survivorship (JTWROS) may feel simple and convenient—but it’s not always the best solution. Depending on your circumstances, this approach could create unexpected complications. Here’s the breakdown on joint ownership for newlyweds…
What Is Joint Ownership?
Joint ownership, or JTWROS, allows two or more people to share equal rights to an account or property. If one owner passes away, the surviving owner(s) automatically take full ownership without needing to go through probate. For example, if you and your spouse jointly own a bank account and one of you passes away, the surviving spouse would become the sole owner once proper documentation is provided.
While this arrangement may seem ideal for simplicity and avoiding probate, there are potential downsides to consider.
The Challenges of Joint Ownership
- Limited Control Over Assets: Jointly owned assets need mutual consent for big decisions like selling or refinancing. Strained relationships can complicate this, sometimes requiring legal help.
- Unrestricted Access: Joint bank account holders can each access and potentially drain the account without the other’s permission.
- Unintended Outcomes After Death: A surviving spouse with sole ownership of an asset isn’t legally bound to follow the deceased’s wishes, risking unintended bequests.
- Impact on Blended Families: Joint tenancy can disinherit children from previous relationships, as all ownership shifts to the surviving spouse upon death.
A Better Alternative: Comprehensive Estate Planning
A thoughtfully crafted estate plan, often involving a trust, can address these challenges while providing greater flexibility and control. Whether it’s protecting family heirlooms, minimizing taxes, or ensuring that your assets are distributed according to your wishes, a trust can be tailored to meet your specific needs.
Take Control of Your Future
While joint ownership for newlyweds may seem like the easiest solution, it’s important to consider the potential risks and limitations. Working with an experienced estate planning professional can help you understand your options and make informed decisions about how to manage and protect your assets.
If you’ve recently married or are planning to acquire new assets with your spouse, we’re here to help. Contact Williams Starbuck’s office today to schedule a consultation and explore the best estate planning strategies for your unique situation.