Joint tenancy is co-ownership. Most assume that this is highly convenient, since when one owner dies, the other receives instant access to the property. Though this is true, there are a number of hiccups that come about from joint tenancy.
When you have joint tenancy, the other owner has control of your asset. For example, you have a co-owner on your home. That means you can’t sell, refinance or use your property without the second owner’s consent.
If your co-owner owes a significant amount of debt and creditors come after him, they can seize your co-owner’s portion of your property to pay off that debt.
Co-ownerships typically happen between couples. If you have a break-up or divorce with your partner, they can remove their share — if not more — from your jointly owned assets.
If you use a joint tenancy or co-ownership with one child and then instruct him to distribute your assets to the others upon your death, there is no legal hold on your child to actually do it. As a co-owner, he can distribute the assets as he sees fit — if at all.
A joint tenancy issue can undo careful tax planning you have already done. This could lead to your estate being subject to estate taxes.
Your joint tenancy asset may become property of your marriage. That means that a co-owner could share your property with you and your spouse.
Before assuming joint tenancy is your way around a will and basic estate plan, consider speaking to an estate planning attorney in your area. An estate planning attorney can help you protect your assets from these common co-ownership issues and make sure your assets and loved ones are protected.
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