New Jersey Lawyers: Hanlon Niemann serving Monmouth County

Know the Pitfalls of Joint Ownership

There are several types of joint ownership. One of the most common is joint ownership with right of survivorship (JTWROS). When one joint co-owner dies, his or her interest passes automatically to the surviving joint owner(s), not to the decedent’s heirs. JTWROS is commonly found on bank accounts, CDs, real estate, etc.

JTWROS does not avoid probate, it postpones it until the death of the surviving joint owner. For example, Fred and Wilma (yes, Fred and Wilma of the Flintstones era for those old enough to know what I mean) have a checking account at Bedrock Savings and Loan, titled in their names JTWROS. If Fred dies first, the account belongs to Wilma. At Wilma’s death the will go through the probate process and distributed according to Wilma’s Last Will and Testament. So at Fred’s death, there is no probate, but there is at Wilma’s.

JTWROS can be an easy and beneficial way to pass assets at death. However, it can also wind up with disastrous unintended consequences. Adding a joint owner is relatively easy. However, changing your mind and removing a co-owner may be difficult. If mom adds daughter as a joint owner on mom’s CD and later changes her mind, mom cannot remove daughter’s name without daughter’s permission. While daughter’s name is on the account, daughter has total access to mom’s money. Daughter’s creditors may also gain access to mom’s money, and can cause mom to lose all of her money. If daughter gets divorced, the funds in the joint account can be subject to the property settlement agreement.

A common problem is when mom’s last will and testament states that she leaves everything equally to her five children. However, two of the children are joint owners on mom’s checking account. Only the two who are co-owners become the owners of the checking account at mom’s death and the other three children do not get anything. This could cause some significant problems in some families. Although the will leaves everything to all five children equally, the will only controls the distribution of assets that are in mom’s sole name and does not control who gets the jointly held assets.

Another problem is when people do not die in the order anticipated and no other estate planning is done. Let’s say dad and son are joint owners on dad’s savings account. If the son dies first, then the savings account will have go through probate at dad’s death, which may not represent dad’s wishes. Also, if a joint owner dies prematurely, that person’s children may not inherit anything. For example, dad and two sons are joint owners (JTWROS) of dad’s house. Oldest son has three children and dad would have wanted oldest son’s share to go to oldest son’s children. However, since the house is JTWROS after dad’s has died, at the older son’s death, the younger son gets everything and oldest son’s children get nothing.

Joint ownership (JTWROS) can be a wonderful and simple way to convey ownership at death.

Most individuals are concerned about making sure their assets and property pass at their death to children as simply and as economically as possible. However, without careful consideration and planning, a person could wind up with disastrous unintended consequences. That is why it is important to consult with an attorney for all your estate planning needs, not the bank teller. Estate planning is done for your loved ones. The peace of mind knowing you have taken care of your legal and financial affairs is a wonderful by-product.

If you have any questions about the contents of this article, please call Fredrick P. Niemann personally at 732-863-9900 or e-mail him at fniemann@hnlawfirm.com.

The information contained in the Hanlon Niemann, P.C. ("HN" or the "firm") website is provided for informational purposes only, and should not be construed as legal advice or an offer to perform services on any subject matter. The content of this website contains general information and may not reflect current legal developments, verdicts or settlements. Recipients of contents from this site, clients or otherwise, should not act or refrain from acting on the basis of any content included in the site without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. HN expressly disclaims all liability with respect to actions taken or not taken based on any or all of the information or other contents of this site. Any information sent to HN via Internet e-mail or through the HN website is not secure and is done so on a non-confidential basis. The transmission of the HN site in part or in whole, and/or communication with HN via Internet e-mail through this site does not constitute or create an attorney-client relationship between HN and any recipients. The firm does not endorse, and is not responsible for, any third-party content that may be accessed through this website. Nothing herein is intended to create an attorney-client relationship and shall not be construed as legal advice. This is not an offer to represent you, nor is it intended to create an attorney-client relationship. The content of any e-mail sent to HN, or any of its attorneys at the e-mail addresses set forth in this website will not create an attorney-client relationship and will not be treated as confidential.

Copyright © 2007 Hanlon Niemann, P.C.. All rights reserved. All materials presented on this site are copyrighted and owned by Hanlon Niemann, P.C., or other individuals or entities as designated. Any republication, retransmission, reproduction, downloading, storing or distribution of all or part of any materials found on this site is expressly prohibited.

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This material may contain technical or typographical errors. HN does not guarantee its accuracy or completeness or suitability. IN NO EVENT SHALL HN BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS MATERIAL, FOR ANY USE OF THIS WEBSITE, OR FOR ANY OTHER HYPERLINKED WEBSITE. HN takes no responsibility and makes no warranty whatever for the content or information contained on sites linked to or from this site. All such links are provided on this website solely for the convenience of users and do not represent any endorsement, advertisement or sponsorship of linked sites or any products or services offered.


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		Know the Pitfalls of Joint Ownership Know the Pitfalls of Joint Ownership There are several types of joint ownership. One of the most common is joint ownership with right of survivorship (JTWROS). When one joint co-owner dies, his or her interest passes automatically to the surviving joint owner(s), not to the decedent’s heirs. JTWROS is commonly found on bank accounts, CDs, real estate, etc. JTWROS does not avoid probate, it postpones it until the death of the surviving joint owner. For example, Fred and Wilma (yes, Fred and Wilma of the Flintstones era for those old enough to know what I mean) have a checking account at Bedrock Savings and Loan, titled in their names JTWROS. If Fred dies first, the account belongs to Wilma. At Wilma’s death the will go through the probate process and distributed according to Wilma’s Last Will and Testament. So at Fred’s death, there is no probate, but there is at Wilma’s. JTWROS can be an easy and beneficial way to pass assets at death. However, it can also wind up with disastrous unintended consequences. Adding a joint owner is relatively easy. However, changing your mind and removing a co-owner may be difficult. If mom adds daughter as a joint owner on mom’s CD and later changes her mind, mom cannot remove daughter’s name without daughter’s permission. While daughter’s name is on the account, daughter has total access to mom’s money. Daughter’s creditors may also gain access to mom’s money, and can cause mom to lose all of her money. If daughter gets divorced, the funds in the joint account can be subject to the property settlement agreement. A common problem is when mom’s last will and testament states that she leaves everything equally to her five children. However, two of the children are joint owners on mom’s checking account. Only the two who are co-owners become the owners of the checking account at mom’s death and the other three children do not get anything. This could cause some significant problems in some families. Although the will leaves everything to all five children equally, the will only controls the distribution of assets that are in mom’s sole name and does not control who gets the jointly held assets. Another problem is when people do not die in the order anticipated and no other estate planning is done. Let’s say dad and son are joint owners on dad’s savings account. If the son dies first, then the savings account will have go through probate at dad’s death, which may not represent dad’s wishes. Also, if a joint owner dies prematurely, that person’s children may not inherit anything. For example, dad and two sons are joint owners (JTWROS) of dad’s house. Oldest son has three children and dad would have wanted oldest son’s share to go to oldest son’s children. However, since the house is JTWROS after dad’s has died, at the older son’s death, the younger son gets everything and oldest son’s children get nothing. Joint ownership (JTWROS) can be a wonderful and simple way to convey ownership at death. Most individuals are concerned about making sure their assets and property pass at their death to children as simply and as economically as possible. However, without careful consideration and planning, a person could wind up with disastrous unintended consequences. That is why it is important to consult with an attorney for all your estate planning needs, not the bank teller. Estate planning is done for your loved ones. The peace of mind knowing you have taken care of your legal and financial affairs is a wonderful by-product. If you have any questions about the contents of this article, please call Fredrick P. Niemann personally at 732-863-9900 or e-mail him at fniemann@hnlawfirm.com. The information contained in the Hanlon Niemann, P.C. ("HN" or the "firm") website is provided for informational purposes only, and should not be construed as legal advice or an offer to perform services on any subject matter. The content of this website contains general information and may not reflect current legal developments, verdicts or settlements. Recipients of contents from this site, clients or otherwise, should not act or refrain from acting on the basis of any content included in the site without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. HN expressly disclaims all liability with respect to actions taken or not taken based on any or all of the information or other contents of this site. Any information sent to HN via Internet e-mail or through the HN website is not secure and is done so on a non-confidential basis. The transmission of the HN site in part or in whole, and/or communication with HN via Internet e-mail through this site does not constitute or create an attorney-client relationship between HN and any recipients. The firm does not endorse, and is not responsible for, any third-party content that may be accessed through this website. Nothing herein is intended to create an attorney-client relationship and shall not be construed as legal advice. This is not an offer to represent you, nor is it intended to create an attorney-client relationship. The content of any e-mail sent to HN, or any of its attorneys at the e-mail addresses set forth in this website will not create an attorney-client relationship and will not be treated as confidential. Copyright © 2007 Hanlon Niemann, P.C.. All rights reserved. All materials presented on this site are copyrighted and owned by Hanlon Niemann, P.C., or other individuals or entities as designated. Any republication, retransmission, reproduction, downloading, storing or distribution of all or part of any materials found on this site is expressly prohibited. NO REPRESENTATIONS This material may contain technical or typographical errors. HN does not guarantee its accuracy or completeness or suitability. IN NO EVENT SHALL HN BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS MATERIAL, FOR ANY USE OF THIS WEBSITE, OR FOR ANY OTHER HYPERLINKED WEBSITE. HN takes no responsibility and makes no warranty whatever for the content or information contained on sites linked to or from this site. All such links are provided on this website solely for the convenience of users and do not represent any endorsement, advertisement or sponsorship of linked sites or any products or services offered.

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