Joint tenancy is a legal concept that many partners, whether romantic couples or business partners, use to avoid probate when one passes away. It’s also referred to as JTWROS, or joint tenants with rights of survivorship. It allows partners to retain equal rights to any assets under the tenancy without having to go through legal channels to gain such rights in the event one partner dies.
Unfortunately, there are also dangers that go along with joint tenancy that need to be carefully considered before you go this route. Discover the risks and dangers of joint tenancy, why you might want to think twice before considering this option, and how an estate planning lawyer can help.
The Dangers of Joint Tenancy
Joint tenancy does have measurable advantages for partnerships. It can, used properly, help to avoid probate courts if someone dies without a full estate plan. Without making the right arrangements, the courts will step in to determine how assets are distributed. Even in terms of a will, sometimes the courts will examine it to ensure that it’s valid.
All told the entire process can take even years if there’s a complex estate in play. JTWROS is a means by which you can quickly transfer liabilities and assets to a surviving partner, getting around probate delays. The risks, however, include things like unstable relationships, loss of asset control, and frozen bank accounts.
Unstable relationships can always be problematic, and joint tenancy kicks in the moment you establish it. This means that any decision you make has to be agreed upon by both partners. If you’ve got a contentious relationship with your partner, you could run into problems while you’re both alive. If you can’t always agree on what needs to be done, consider carefully before pursuing this option.
Loss of Asset Control
Do you have solid plans for your business or assets after you die? Do you want them to continue on a specific path? If you use joint tenancy, that won’t matter. All of your control disappears to your partner in the case of your death. That means they can sell off your assets or even bequeath them to someone else.
If you pass away and are heavily in debt, even joint tenancy might not stop probate courts. They can step in to ensure that these debts are paid before anyone gets anything. This can lead to frozen bank accounts in order to stop the liquidation of any assets for the purposes of avoiding debt payment. If there are questions about the nature of liabilities, joint tenancy may not protect you.
Why Call an Estate Planning Lawyer
If you’ve got any questions about JTWROS and your assets, you might want to call an estate planning lawyer. The right attorney can help you explore other alternatives, like passing assets to heirs, creating split ownership of assets, or a range of other options. If you’re in Ohio and need help with your estate planning issues, call the Stano Law Firm for help today.