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Elder Law Update

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Joint Ownership
 
Joint owners share ownership of property such as a home or a bank account. Each person owns the property and has all the rights of an owner. For example, each joint owner of a bank account can withdraw money from the account. The property may become subject to any debts or claims against one of the joint owners.
 
You should be very confident in the other person’s honesty and financial responsibility before transferring property into joint ownership.

Considerations 

If you are thinking about transferring property into joint ownership, consider the following:


  • Is the person honest and financially responsible?
  • Is there a risk that my property will be subject to this person’s creditors now or in the future?
  • Might there be a time when I want to take the property back?
  • What are the tax or other consequences of putting the property in joint ownership?
  • Upon my death, do I want the entire interest in this property to go to this person?
  • Is there another option that would achieve the same purpose?
Possible Consequences 

Once you make someone a joint owner, you cannot take the property back without the other person’s consent. There may also be consequences regarding eligibility for government programs like Medicaid that you should discuss beforehand with a knowledgeable advisor. You may also lose tax benefits given to older property holders.

 

Joint ownership often comes with a “right of survivorship.” This means that when one joint owner dies, the surviving joint owner(s) will automatically receive full ownership of the

property. Because this happens automatically, the property does not become part of the deceased owner’s probate estate. This may be an advantage if you would have left the property to the joint owner anyway, but may be an unintended consequence if you would not have done so.
 
Alternatives to Joint Ownership

As an alternative to joint ownership, you can put a second person on a bank account as your agent, but not as a joint owner. Sometimes called a “convenience account,” this allows the agent to make deposits and withdrawals only on your behalf. Of course, the person still has access to your bank account, but you may be able to limit how or how much he or she can withdraw. Talk to your bank representative about this option.
 
For real property, Oklahoma now allows owners to execute Transfer-On-Death deeds.
 
More on Transfer-On-Death Deeds