Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan

Joint tenancy with right of survivorship (JTWROS) accounts, as well as pay-on-death or transfer-on- death accounts, can be wonderfully useful tools in some situations. Sometimes, they can be a helpful part of your overall estate planning. In certain circumstances, they can be a simple and low- maintenance way ensure that your assets pass to your desired beneficiaries without the hassles, costs and delays of probate administration. However, in many other situations,

Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan they can be risky way to try to avoid probate. They can potentially put your wealth in jeopardy if the person you've added to your account decides to use the account funds for his own purposes, rather than your goals. Alternately, even if the person you've added to your account is above reproach, your assets could still be at risk if that person divorces or is successfully sued by someone. What's more, they ca also pose the potential of requiring expensive and stressful court litigation in order to get your wealth to the beneficiaries that you wanted to have it.

Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan Take, for example, a case decided by the courts in September The case involved the estate of man named John, who was a senior in declining health in the final years of his life. He had both a checking account and a savings account. He had several people listed on his checking account as authorized signors. They included, in addition to John, his daughter, a grandson and the grandson's wife. On the savings account, authorized signors included John, the daughter and the grandson's wife.

Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan The problems arose shortly after John died. First, the grandson withdrew $22,000 from John's checking account. The grandson's wife then withdrew nearly $26,000 from John's savings account. This sum of almost $48,000 represented roughly 50% of the total amount in the two accounts combined. The couple claimed that they were entitled to the money because the accounts were joint accounts with right of survivorship. In an account that is truly a JTWROS, all of the "tenants," or owners of the account, have equal claims to the account's assets in the event of the death of the account holders.

Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan In John's case, the problem that led to the court battle was a lack of clarity. If the account truly was a JTWROS asset, then the grandson and his wife had the legal right to withdraw the funds that they withdrew for whatever purposes they wanted. However, John's daughter, who was acting on behalf of John's estate, claimed that the grandson and wife were not joint tenants; they were only added to John's accounts as signatories as a convenience to John. Ultimately, the courts sided with the daughter. The trial court ruled that the grandson and wife didn't have any evidence to show that John intended for the money in his checking and savings to pass to the daughter, grandson and grandson's wife as a JTWROS account would.

Using 'Joint Tenancy With Right of Survivorship' Accounts as Part of Your Estate Plan Careful planning can potentially help you avoid an unfavorable situation like what happened with this man's estate. There are ways to create a plan that will take the guesswork out of your planning goals. One example is a revocable living trust, which can allow you to dictate, with great specificity, exactly what you want to achieve with regard to each of your assets and each of your beneficiaries. In addition to this, it can also benefit you by avoiding probate while at the same time sidestepping some of the risks involved with other probate-avoidance techniques like JTWROS accounts.