One of the ways you can prepare for possible incapacity, or the inability to make financial decisions on your own, is to put some your assets into joint ownership with right of survivorship. For example, you may name of your children as a joint owner on your bank account so your child can handle deposits and pay bills from your account. If you live in Washington DC and need to know more about the estate planning tactics that will work for you, here are some important points to consider.
The challenge of joint tenancy
There are some estate planning issues to think about if you think joint tenancy may be the right option for you.
An example of this might be when a co-owner of a bank account passes away, the surviving owner will automatically inherit the remainder of the money in the account. This will occur no matter what the decedent’s will indicates. So, if you assign your spouse or child as the co-owner of your account or assets, they will inherit the funds.
It is also important to note that joint ownership does not protect you from the poor judgment of the asset co-owner. If your mother or grandmother takes on the money from the account to invest in a scam or your child uses all the money on clothing and jewelry, there is no law in place to stop them.
Keep in mind that your creditors, as well as the joint owner’s creditors, may have access to the account to pay outstanding debts.
Reducing the need for joint tenancy
You can lower your need for joint tenancy during your estate planning process by arranging for the automatic deposit of your Social Security checks and investment income. You can also sign up for auto-pay for your household bills.