Money Matters
jtmh2012
mod
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Question for the legal people in the house.....
Just curious if any of the legal people here practice in a state where "joint tenancy by entirety" is recognized? Or are at least well read enough to comment on it?
Reason I'm asking, I have a couple financial accounts that are still in my name only. I'd like to get my wife listed on them and this is an option. From what I'm reading, it has its pluses and minuses, but most of what I find online seems to be intentionally vague.
I have a feeling a visit with a lawyer/cpa/something is in my future for estate planning if nothing else.
Reason I'm asking, I have a couple financial accounts that are still in my name only. I'd like to get my wife listed on them and this is an option. From what I'm reading, it has its pluses and minuses, but most of what I find online seems to be intentionally vague.
I have a feeling a visit with a lawyer/cpa/something is in my future for estate planning if nothing else.
Re: Question for the legal people in the house.....
I'm not a property lawyer, but very basically tenancy by the entirety means you and your spouse - as a single unit - own property. You can't sign away title without both spouses consenting. Also, if you die then property automatically passes to the surviving spouse.
That's really all there is to it as far as I know.
H and I title most things as JTWROS, but there are some things we title individually, and we are probably going to move toward titling marital assets as community property. I don't live in a community property state, but there's a way to do it with trusts, and it gives your spouse a stepped up basis when you die.
But yeah, that's it in a nutshell, and I don't think there's much else to know about it.
Disclaimer: I'm not a property lawyer, and this is not legal advice.
I was actually hoping you'd respond, but wasn't sure since I didn't see your state on the list that recognized it.
From what I can tell, the biggest difference comes down to when you get sued or have a creditor after you. The way I read it, with JTWROS a creditor can attach to the 50% that each spouse has right to. Forcing a sale if need be to get that half. With joint tenancy in the entirety they would have to have a claim against both husband and wife. However, the legal gotcha seems to be if say my wife has a car accident and is sued as a result of the accident, but also dies as a result. Then I get full ownership of the asset, but the other party can now easily attach to the entire asset.
Neither one of these really sounds like a better solution.
I actually considered trusts as well.
At some point I need to sit down with someone, but not really sure who I should be sitting down with and what to even ask for. Want to be able to go in semi-educated to avoid being taken advantage of.
I do know we need wills now that we have the little one though.
Here in CO we use the terms joint tenancy or tenants in common. Joint tenancy is what is most common for married couples. Tenants in common is more along the lines of JTWROS in other places. I personally don't see why any married couple would use JTWROS or Tenants in Common.
If I remember correctly, a "thing" in San Francisco is for people, even if they're strangers, to buy apartment buildings as tenants in common, versus buying a condo in a building. So, if one of the TIC dies, their portion goes to their heir, versus to the other TICs in the building. The housing market there is so crazy, this is the only way some people can afford to own a home.
JTWROS is "joint tenants with right of survivorship." It is the same thing as a joint tenancy in most states, except survivorship rights are explicitly stated so there can be no confusion. If you own property as JTWROS then when you die your share typically goes to the other co-owner automatically. This is why many married couples use it. It's very similar to tenancy by the entirety, except JTWROS can exist between unmarried people if the property is titled correctly, whereas tenancy by the entirety requires marriage.
For example, my grandmother live in California her whole life but owned a lot adjacent to my parents' land in Georgia because she thought she might build there at some point. She and my dad had that land titled as JTWROS because all her other assets and all of the other heirs lived in California. It made no sense to have that land go through probate when it was literally adjacent to my parents' land. When she died, my dad became the sole owner automatically. Then he had it retitled so that he and my mom are now JTWROS on that land.
Tenancy in common is where you own 50% outright, and if you die then your 50% goes to your heirs, regardless of who the co-owner is.
To use the example of my grandmother's land... if she and my dad had that titled as tenancy in common, then when she died my dad would still have owned his 50%, but my grandmother's 50% would have gone through probate to be divided 1/6 between all of her children. So the other five kids would have ended up owning 1/12 (which is 1/6 of her 50%), and my dad would have owned 7/12.
In theory, joint tenancy/JTWROS/tenancy by the entirety means that each owner owns 100% of the interest. In many states this means all owners have to sign off on property transfers (but it's not a hard and vast rule). Tenancy in common means you own a specified percentage than can be divided and transferred without the other owners' consent.
**Caveat - property is weird.
It's all really archaic.
And if you live in Louisiana everything is based on the French system, so lawyers in the other 49 states have no idea what goes on there (sorry @short+sassy).
It's okay, I know we're weirdos, lol. Marching to our own Napoleonic drum.
Edited to add:
So this sent me on a Google curiosity search. I know lawyers need to be licensed for the particular state they work in...which made me wonder if that meant the Bar Exam is state specific.
What I found was the Bar Exam is taken over two days. The first day is the Multi-State Bar Examination (MBE) and the second day is state specific questions, usually in essay format. Some jurisdictions also have a third Multi-State Performance Test (MSP).
And here was the funny side note. Every jurisdiction includes the MBE in their Bar Exam...except Louisiana.
Most legal areas really don't require state-level expertise, and even if it's different it's just stuff you can look up in the state code. For example, I form companies all over the place. LLCs are largely similar across jurisdictional lines, with a few variations that I always have to look up. I've formed LLCs or corporations in AL, GA, NC, SC, WA, CO, DE, TN, MS, LA and probably a few others I'm forgetting.
Property and inheritance stuff gets screwy though.
Word on the street is that Louisiana is talking about revising their bar exam because it does their lawyers a disservice to totally ignore the federal stuff. Not sure how long that will take though!