Make Personal Financial Planning a Priority to Avoid the Joint Tenancy Trap

Many people assume that when they own property jointly with another person, the rights of survivorship are an effective substitution for other estate planning measures, like a will. The main advantage of establishing Joint With Right of Survivorship (JWROS) clauses during the personal financial planning process is that due to the rights of survivorship, the property immediately passes to the surviving co-owner upon the death of the owner without first going through probate. Benefits of this approach include saving time and money while keeping personal affairs private.

personal financial planning process is that due to the rights of survivorship

While advantageous in many cases, putting assets into JWROS is not a foolproof method when other interests in the property exist. For example, if a grandfather lists a grandchild as a joint owner on his bank account, the grandchild can argue that, upon the death of their grandfather, the account passes to them on grounds of survivorship. However, others who hold interest in the grandfather’s estate may argue that the grandchild was only holding trust for the account, and any funding included should be distributed according to the stipulations in the established will.

The JWROS process may seem like a straightforward personal financial planning approach, and issues typically do not arise when used between spouses and partners, but this method can get more complicated when assets are transferred into JWROS with children and grandchildren. This mainly comes down to a question of whether assets were intended to be left to the joint owner alone or distributed according to the terms of a will, just like in the example previously mentioned.

Our advisors at BlueRock Wealth Management can help you avoid this common joint tenancy trap and ensure your intentions are clear at all stages of the estate planning and personal financial planning process. For assistance navigating joint tenancy within your estate as you plan for the future, contact us today to set up an appointment.

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