I often see older people with other peoples’ names on their property as co-owners. Legally, the ownership is joint tenants with right of survivorship, meaning that upon the death of one joint tenant, the surviving joint tenant becomes the sole owner of the property.
Owning property comes with many ups and downs. So it’s no surprise that “joint ownership” can be double the trouble.
A recent article in Forbes reviews some of “The Perils Of Joint Ownership.”
Having two people named as owners, legally dubbed “joint tenants with right of survivorship,” or “joint tenancy” for short, is quite common amongst the elderly and families after transition. Unfortunately, unless the joint owners are spouses (the most common form of joint ownership by far) it can quickly become a problematic scenario.
Imagine: homes, bank accounts, and other common assets being controlled by two independent minds with independent agendas. The original article has a few examples, but an all-too-common scenario is the older relative and a younger relative owning the assets of the older relative in joint tenancy. If and when the younger relative realizes that he or she has the power to use and enjoy the joint assets, then problems are not far behind.
What are some concrete concerns? The original article fleshes out three:
- Once a person’s name is added to the title of property, it can be undone only with his or her consent.
- Property held in joint tenancy is immediately subject to claims of each joint tenant’s creditors.
- Joint tenancy can produce unintended results.
Sometimes joint tenancy is a valid option, and even a quite beneficial one. That noted, there are other safer alternative means to reach the same ends.
Reference: Forbes (June 14, 2013) “The Perils Of Joint Ownership”