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Chapter 1. Asset Protection > Joint Ownership

Joint Ownership

“Joint ownership” means multiple people own the same property (which can be real estate, bank accounts, stocks or whatever) in such a way that if one of the owners were to die, the others would automatically inherit the deceased co-owner’s share without having to probate that person’s co-ownership interest. Designation of joint ownership may be made by the words “joint owners,” “joint tenants with right of survivorship” or “JTWROS.”

Although many people choose joint ownership as a simple way of avoiding probate, there are considerable risks involved with this form of owning property. First, it drastically limits your ability to do estate tax planning with the property. Second, and perhaps more important, putting someone’s name on your account may make your account subject to claims of that person’s creditors (including, of course, the IRS, who, not surprisingly, have extraordinary powers to deal with assets held jointly by someone from whom they are trying to collect payments). It is for these reasons that one of my professors at Boston College Law School always advised us, “Stay out of expensive joints.” I think he also may have wanted us to be frugal, but that is another story.


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