Pros and cons of joint ownership

On Behalf of | Nov 27, 2018 | trusts

Many North Carolina residents want to save time and make life easier for their heirs while also ensuring that their own bills will be paid off in the future. A key goal in estate planning is often to avoid probate and allow property to pass on without having to go to court. This is one reason why many people turn to joint ownership as a way to save time and money.

Joint homeownership between spouses is very common, and it usually is accompanied by a right of survivorship. This means that if one spouse passes away, the other spouse will own the home in full without needing to inherit it in the will or go through probate. The same is true of joint bank accounts and other property with a survivorship right. Many older adults who are single, divorced or widowed also seek help from their adult children, and this can include joint ownership of assets.

Establishing a joint account can appear to be a simple solution to many problems. It’s easy to add a joint owner to a bank account; both people simply need to go to a bank branch and sign papers. Once that is complete, both people are legally full owners of the property with equal rights to access and control it. While this can ease the transition and allow adult children to help their parents, it also means that the joint owner could take all of the money from the account or use it without authorization.

Someone who is planning for the future can consult with an estate planning attorney about how to manage their assets. A lawyer can suggest options like a revocable trust, which allows estate owners avoid probate without some of the downsides of joint ownership.