The Unintended Consequences of Joint Ownership

9:48 pm Asset Protection, Estate Planning

senior woman3 e1315950493509 The Unintended Consequences of Joint OwnershipA blog post today does a good job of explaining some of the unintended consequences of parent-child joint ownership of assets.

The author uses a fairly standard example of what can occur when an aging parent adds an adult child as a joint owner of a bank or investment account or even real estate.  The “imaginary horrible” can occur under the following circumstances:

Divorce:  A parent’s assets could get tied up by a child’s soon-to-be ex if that ex claims the joint assets as part of the marital estate.

Creditors:  If an adult child is the joint owner of a parent’s accounts and has a mountain of debt or has to file bankruptcy, that child’s creditors can try to lay claim to the assets.

Temptation:  If an adult child has financial problems, they may be tempted to “borrow” from a parent’s account to satisfy debts.

Inheritance:  If the parent dies and the adult child is the surviving joint owner of assets, he or she doesn’t have to share with siblings, no matter what the parent may have intended.

Basic estate planning tools – including wills, living trusts and powers of attorney – can accomplish the same goals as joint ownership without the risks or unintended consequences.  Estate planning also provides you with control over your assets while still allowing you to get any assistance you may need.

Let our Costa Mesa law offices help you get started by contacting us today.

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