What are the words written on the side view mirrors on your car? It says something along the lines of, “Objects in mirror are closer than they appear.” This warning is because the mirror is convex and curved outward. The convex shape allows drivers to see more of the area behind and to the side of the vehicle, essentially providing a wider field of view and reducing blind spots. The reasoning behind bringing this up is that we like to use this analogy for discussing joint ownership—because it isn’t all it seems to be.
Joint ownership is convenient, especially for married couples who acquire and own assets, such as their home, banking accounts, and investments. However, retirement accounts and 401(k) plans can never be jointly owned. It is common for married couples to purchase homes in both names. Although we pointed out that it is convenient, it is also how people plan estate. We have heard of at least one attorney referring to “joint ownership” as the poor man’s estate planning. When you own everything jointly, you have a plan built in because—in most cases—when you pass away, the assets default to your spouse.
The Wrong Assumption
Some people believe there is no need for estate planning because they own everything together. It is a common way to title assets, and you know how much we stress that title trumps everything. The concern is that people hold onto the belief that joint ownership negates the need for estate planning.
Think about the couple who purchases a home jointly and are told they must protect their investment. They may then go to an attorney and have a will drawn up stating that everything goes to their spouse when they pass away. Ironically, because of how they titled the home, it negates the will. A bedrock legal principle in estate planning is that the title always wins when the title says X and a document says Y. The title dictates what happens to that house as opposed to the will. The scary truth is that many couples’ titles and documents must be coordinated.
What does this mean for you? If you are going to spend money to create an estate planning document, ensure that you also have a conversation about how your assets will be titled. Here’s a simple test: Take a look at your bank statement. If you have a joint bank account, that will override anything you have put in your will regarding where the money goes when you pass away. We want to highlight the problem of joint ownership negating your estate planning documents.
Secure Your Legacy Simply and Securely
Ensuring your wishes are followed, and your assets are handled correctly after you’re gone can be confusing and complex, especially with joint ownership. At J. Kevin Tharpe, P.C., we’re here to guide you through every step of estate planning and elder law with experience and kindness. Your peace of mind and clear, simple solutions are our top priority. Don’t leave your legacy to chance—reach out to us today. Let’s create a plan that makes sure your assets tell the story you want them to, securing a future for your loved ones that’s both strong and straightforward. Contact J. Kevin Tharpe, P.C., and take that vital step to ensure a legacy that speaks true to your wishes.
Kevin Tharpe
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