Joint Tenancies Part III: Planning Considerations

Video

Hi folks, it’s Andy Stautz with Stautz Law. We are back at part three of our three-part series on joint tenancies. So on the first one, we talked about what joint tenancies are. Our second video talked about survivorship affidavits and making sure you clear up joint tenancies when they’re over. This one, which I’m recording hard on the heels of the other ones, is about, like, What are we doing? What are some considerations you know? Should we plan using joint tenancies?  

Joint Tenancies and Married Couples

So I think the thing to remember is when a married couple buys property in Indiana there’s a presumption that they buy it jointly as tenants by the entirety. The type of joint tenancy. It’s reserved for married couples, but that’s like … that’s the default. That’s what you’re getting.  

That works well for a lot of people because a lot of people’s estate plan is, you know, “all to my wife, then to my kids,” “all to my husband, then to my kids.” So. It’s a guess. It’s a good guess by the state of Indiana about how you want property with your spouse to work. It doesn’t mean it’s right in every situation.  

Also, ordinary joint tenancies you can create with anyone. … You don’t have to be married.  

Caution: Right of Survivorship Works Even If You Don’t Like It

I think you need to be really careful when you’re using joint tenancies in planning, because they’re so slippery. I mean, I mean, sometimes they work when you don’t want them to. Because the right of survivorship applies to whoever survives.  

You know? it’s not like, ohh, we’ll stop and think about it and decide. Right. And if you’ve got a right of survivorship, you don’t get to pass the property by will or, you know, in a trust, a testamentary trust, a pour-over will, none of that. So it it’s like. ZAP. It happens. It’s a shortcut against the rest of your estate plan.  

Joint Tenancies as Cheap Estate Plan

And if you want quick and dirty, you know, great. It does that. It’s cheap. You don’t need to do anything.  

But if your circumstances change over time, it’s risky because it’s just kind of sitting out there.  

How a right of survivorship goes wrong

So I used an example in a previous video of someone who remarried and you know the new wife is …. is on the on the deed to the property and the old will says, oh, the property goes to my son. Well, that will has nothing to give anymore because when the husband dies, the new wife gets it, and the the son by the prior marriage doesn’t. And that’s almost certainly not what the man had in mind . . . you know, who knows, but . . . .  

So they’re squirrelly. You know, they just…. If you’re not on top of how you own the property, you might not like what’s going to happen. So that’s probably the main reason.  

Behavior Problems with Joint Tenants

The other reason is you know you and your joint tenants have to get along. There aren’t separately descendible shares. That’s why you can’t give it away by will. Uh. So you might… you and your joint tenants’ estate plans have to line up to that extent. The only way to undo it is you know, you agree to sell or you go to a court and you have a partition action. It gets messy.  

Conclusion: You Need a Complete Plan

So tenancies by the entireties for married couples, usually good; joint tenants with other people, behaviorally risky. Either way you need estate planning strategy built around it, so don’t just assume that what you’ve got is going to is going to work.  

Happy to talk about this topic or any other with you because I love solving estate planning puzzles, so I hope to work with you on your plan. Give me a call. We’ll talk more about it, but that’s all for today. Bye now.