No way! Married people need estate plans. Some folks think that because they own assets jointly with a spouse, they don’t need an estate plan. In fact, joint ownership is called a “poor man’s estate plan.” In reality, it should just be called a “poor estate plan.”
Joint tenancy ownership is riddled with perils. Likely, the most serious peril is the unintentional disinheritance of your children. Sadly, it happens too often because of joint ownership.
This is what can happen when you own assets in joint tenancy with your spouse:
Tom and Tina are married and have three children. All of their assets are owned in joint tenancy (or will be distributed by beneficiary designation to the surviving spouse which will have the identical effect.)
Tom goes surfing off the California coast and is eaten by a shark.
Tina inherits everything owned in joint tenancy by operation of law (or beneficiary designation.)
After an appropriate period of mourning, Tina marries Phil. Because she is used to owning everything jointly, she puts all of her assets (and Tom’s assets) in joint tenancy with Phil.
On their first year anniversary trip to Hawaii, Tina falls off a cliff and is killed. Phil inherits everything he owned jointly with Tina (regardless of what Tina’s will provides because a will doesn’t control joint tenancy property.)
In his despair, Phil dies of a broken heart six months later.
Who inherits all of Phil’s money (much of which used to Tom and Tina’s money)?
Phil’s children get it all.
What do Tom and Tina’s three children inherit? Nothing.
You can avoid disinheriting your children:
Use trust planning to avoid unintentionally disinheriting your children. With a trust, assets won’t go directly to your spouse, outright, such as with jointly owned property. Instead assets will go into a trust for the benefit of your spouse and your children.
When your spouse dies, your children will inherit. This is why married couples need an estate plan.
- What is Proposition 19 and Why You Should Care (2 of 2) - January 11, 2021
- What is Proposition 19 and Why You Should Care (1 of 2) - January 11, 2021
- Is a DIY Will Valid? - January 7, 2021