One potential situation that many people in New York entertain when they start thinking about their estates is planning for what could happen if they become incapacitated and can’t make decisions for themselves. One popular option is to put assets in joint ownership with rights of survivorship, which allows another person, such as a spouse, son, daughter, or whoever you choose, to pay bills, transfer funds, etc. Potential problems can occur when you select this route.
Possible incapacity scenarios
There are fewer risks if you have a trusted spouse, but remember that anyone who has joint ownership can assume complete control if you are incapacitated. Another problem is that the account assets will go directly to the co-owner if you die during incapacitation. That means that even if you have a will created as part of the estate planning process, the assets of any accounts put in joint ownership won’t be available to other heirs.
Another common problem is that the joint account holder may exercise poor judgment when handling the assets. The co-owner could end up spending or selling all of the assets, which could prove disasterous if you come out of your incapacitation. Another potential complication that can occur is that the co-owner’s creditors will have access to the account assets if bankruptcy occurs.
Avoiding joint ownership problems
Careful estate planning can help avoid problems associated with joint accounts. Tactics such as arranging for automatic deposits for Social Security and investment income along with utility bill payments can go a long way toward avoiding problems. Keep only a small amount of assets in joint accounts if you wish to have someone else as a co-owner.
Working with an experienced estate attorney can help you plan for a variety of scenarios. It’s never too late to begin the process.