Law FAQ: Doesn’t joint ownership avoid probate?

Law FAQ: Doesn’t joint ownership avoid probate?

Not really. Using joint ownership usually just postpones probate.  With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate.  But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the beneficiaries.  Click here  to read my post from last week about the problems with a probate court administration.

Watch out for other problems associated with jointly-owned assets.  When you add a joint owner, you lose control.  Your chances of being named in a lawsuit and of losing the asset to a creditor of the new joint owner are increased.  There could also be gift and/or income tax problems.  And since a will does not control jointly-owned assets, you could disinherit your family (click here to read a post by Lindsay Jones about unintended heirs).

With some assets, especially real estate, all owners must sign to sell or refinance.  So if a joint owner becomes incapacitated, you could find yourself with a new joint owner – the court – even if the incapacitated owner is your spouse.

Our firm recommends estate planning strategies that can reduce the problems associated with jointly-owned assets, or even eliminate them altogether.  For example, click here to read my prior post about using revocable living trusts.

Feel free to contact us for more information.

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