14 minutes | Friday, May 24, 2024
Although Joint Tenancy offers some short-term conveniences, in the long run it poses a host of problems that can cost you and your loved ones many times the expense and headaches you thought you were avoiding. Estate planning attorney Steve Waltar with Legacy Estate Planning joins Suzanne to talk about the difficulties of using joint tenancy while trying to plan your estate. Steve shares an example. "It's a stark story. The mom had already been through a probate, because her husband died, and so she wanted to avoid that. She did a will, listed her three children. That's fine. But the problem was, then she took her $400,000 brokerage account and she thought it would go through probate. 'I'm gonna add my son to the account. He knows more than I, he studies Morningstar, blah, blah, blah.' Well, son was a pretty good kid, but one day he was driving to the Seahawks game and he was in a car accident, and it was his fault. The PI attorneys are pretty good. They do asset checks before they sue people, and they saw that he owned this joint account, he was on title with mom. And so when they collected $100,000 judgment, they went after and they took it from that account. "So joint tenancy is you adding someone to an account where you each own 100%. It's not like a house. In Washington, a husband and wife own a house, they each own half. When you own a joint — a liquid account — the default in Washington is 100%. So it could be a $2,000 bank account. Well, that's not a huge amount. But a brokerage account, why would you add children to that? And then when mom died, the balance of that account didn't get controlled by the will. It went to the son. "It is a probate avoidance tool. It can be appropriate in limited circumstances. But why in the world, once children are out of your house, would you add them to your accounts? It's much better to make it payable on death to them, and give them a power of attorney to manage. "Joint tenancies, it's done all the time. I have a report called 'The Trouble With Joint Tenancy,' it just gives a lot of the details. It's very easy to create. You just go down to a bank and you have a bunch of people on an account, they all own it. Anyone can withdraw all the money. It'll only go to the survivors, your will and trust won't control it." Joint Tenancy article by Steve Waltar Legacy Estate Planning at Answers for Elders Legacy Estate Planning website More podcasts with Steve Waltar Find an attorney near you at the American Academy of Estate Planning Attorneys website Check out our affiliate podcast Alzheimer’s Speaks See omnystudio.com/listener for privacy information.