Isn joint ownership with the right of survivorship a good alternative to having a will or a trust?
Unfortunately, joint ownership with survivorship, other than for property owned by a couple, can be dangerous because it can expose your assets to the joint owner’s present or future financial problems. For example, if you held property in joint ownership with the right of survivorship with one of your children, and that child then had financial problems which resulted in a judgment being entered against him or her, that judgment could attach to real estate that you owned jointly or could be used to garnish money from a bank account held jointly with that child. In addition, joint ownership of appreciated property can result in loss of a significant income tax benefit to individuals who receive property through an estate or a trust. Known as the “step-up in basis”, it means that the beneficiaries do not pay income taxes on the income they receive when they sell highly appreciated assets after one’s death.
Unfortunately, joint ownership with survivorship, other than for property owned by a couple, can be dangerous because it can expose your assets to the joint owner’s present or future financial problems. For example, if you held property in joint ownership with the right of survivorship with one of your children, and that child then had financial problems which resulted in a judgment being entered against him or her, that judgment could attach to real estate that you owned jointly or could be used to garnish money from a bank account held jointly with that child. In addition, joint ownership of appreciated property can result in loss of a significant income tax benefit to individuals who receive property through an estate or a trust.
