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Joint Tenancy May Not Be Right for Newlyweds



If you are recently married or have been married and are acquiring additional assets, know that you have options when it comes to how the property will be titled. And, although joint tenancy seems like an easy and convenient choice, it may not work as well as you would think.

What is Joint Tenancy?

After getting married, it is common for couples to take title to one another’s bank accounts, brokerage accounts, personal property, and other assets as joint tenants with rights of survivorship (“JTWROS”). An asset that is titled as JTWROS is owned by at least two people with each party (or tenant) having an equal right to the asset. Each tenant is also afforded survivorship rights in the event one of the other tenants passes away. For example, if a married couple owns a bank account as JTWROS and one spouse dies, the surviving spouse automatically inherits sole ownership of the account. This is also known as Transfer on Death (“TOD”). Although this may seem like an easy solution to owning your assets and avoiding probate, there are some pitfalls to holding property as JTWROS, especially if you are married.

Issues with Joint Tenancy

Before discussing the issues, remember, as lawyers and advisors, our job is to live in the world of “horribles”. Meaning that we have to consider and advise as if everything does not go as planned. After all, if all goes as planned, we are usually not needed.