There are many reasons to add another person’s name to the titles of your property, but typically, except between spouses, joint ownership is usually a bad idea.
Once you name someone as a joint owner, both owners have full rights to make withdrawals from the account. In most cases, naming your child as a joint owner seems as if it would make your life simpler, however if you find that money is mysteriously being withdrawn from the account, technically your child has that right, even if it wasn’t your intention by naming him or her as joint owner.
Additionally, if a person is added to the title of property, it can only be undone with his or her consent. So, if after adding your child’s name to the title of your house, you can’t take it off unless your child agrees to remove his or her name.
Moreso, any property jointly titled is subject to claim’s by each joint owner’s creditors. If the person you name as joint owner is in debt, your property could be up for grabs simply because their name is on the title.
And finally, having property that is jointly owned will make it so that it does not pass through the estate at the time of death. A key example of this occurred recently, when a client died and left all of her property to her three kids. Most of her estate lied in a bank account that was titled jointly with her one daughter. She initially put her daughter on the joint account out of convenience, especially because this daughter lived nearby. However, at the client’s death, instead of the account being included in her estate and divided among her children equally, the daughter was given the entire account as she was now the owner. Her siblings, on the other hand, got very little inheritance from the estate.
Luckily, there are other options to naming a joint owner on your accounts. Talk to your local attorney, or give us a call at (717) 560-4966, to find out your options.