Potential Problems With Joint Tenancy

Often times people decide to add other names to the title ofthe property they own. Once the names are added to the title the named individuals are considered co-owners of the property. Legallythis is called joint tenancy. However, people should be cautious when enteringinto a joint tenancy. There are many illustrative examples about why peopleshould think twice about creating a joint tenancy, but here are a few underlyingreasons why joint tenancy might not be a good idea.

1. Joint tenancy of financial accounts increase theodds of embezzlement.
2. It is difficult to remove a person’s name off atitle for property because it requires the consent of the person whose name isbeing removed.
3. The property is subject to both tenants’creditors immediately. This exposes the property to more liabilities.
4.  Joint tenancy can create unanticipated outcomes such asaccounts being passed outside of probate.
5. There are other estate planning alternativessuch as a revocable trust that can accomplish similar goals.

See Stephen J. Dunn, The Perils of Joint Ownership, Forbes, Jun. 14, 2013.