Wednesday, October 5, 2011
Joint ownership between generations can cause problems after the death of the older joint owner. Five reasons an older individual should be wary of using joint ownership between generations are below:
- The jointly owned assets are available to creditors of both joint owners.
- If one of the owners gets divorced, the non-owner, divorcing spouse may be able to claim the joint assets as part of the marital estate.
- Both owners can take jointly owned assets at will, meaning that irresponsible son could take elderly mom’s money right from under her nose.
- The surviving joint owner has no obligation to divide the jointly owned funds among other heirs at the death of the predeceasing joint owner.
- Joint ownership between generations can often lead to family court fights after the death of the predeceasing owner, especially if the surviving owner refuses to divide funds with other heirs.
For more information on potential problems with joint ownership between generations, see Danielle and Andy Mayoras, Top 5 Reasons to Beware of Joint Ownership Between Generations, Forbes, Sep. 13, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.