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What is Joint Tenancy and When Should I Use It? | The American College of Trust and Estate Counsel - YouTube
Channel: The American College of Trust and Estate Counsel
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good morning my name is Rick ganz I'm an
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act tech fellow and I'm here this
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morning with Tammi caneta another act
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tech fellow from Sarasota Florida
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and our topic today is joint tenancy so
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Tammy what is joint tenancy so joint
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tenancy Rick is when two or more people
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owned one asset altogether and so it can
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either be with Ryder survivorship so
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that each one has their share and at
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their death their share passes to the
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survivors or it can be a tendency in
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common where each one just owns their
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separate share and and manages that as
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their own asset so my clients will bring
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in statements for me to look at and I
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see the letters J TW o ro S on that and
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what does that stand for so that's
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telling you that that account is joint
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tenant with right of survivorship which
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means as I said if one of them dies then
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the other one becomes the sole owner of
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that account okay what advantages are
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there to holding assets and joint
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tenancy so there are two primary
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advantages the first one is that during
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lifetime both that the joint tenants
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have access to that asset so in your
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example with the account either one of
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the owners could come in and make
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distributions or contributions to the
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account and the second advantage is at
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the time of death it avoids probate
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because that is the the structure of
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joint ownership so instead of having to
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go through the probate court or do some
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other extensive transfer process they
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just walk in with a death certificate
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and they become the owner it's very
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simple so during the lifetime of both of
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the owners can one of the owners take
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out all the money or just half that's
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one of the risks so with an account like
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you mentioned any one either one of the
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owners can come in and take it out with
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real estate and joint ownership it's a
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little bit different
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the state laws may control how much but
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one of the one of the owners could
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actually terminate the tenancy by to
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deed out there have there any other
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disadvantages well a lot of people don't
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consider the tax ramifications of a
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joint ownership and so it is possible if
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I'm putting somebody who is not my
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spouse on a joint account with me that I
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made a taxable gift because
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to your point that can go in and we can
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take it out and so their immediate
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access to those funds makes it a taxable
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gift and so they don't think about the
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gift tax consequences there also could
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be some concerns about the creditors of
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that joint owner maybe getting access to
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those assets as well so you mentioned
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that you could have real estate owned as
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joint tenancy so suppose that my client
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and my clients son are on the deed and
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that's all that's on the deed client and
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client son I'm automatically a joint
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tenancy or does that vary from state to
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state and deed from deed well I think in
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in most states it is a joint tenancy
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what's not clear is whether it is with
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or without rights of survivorship and so
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that should be clarified okay so if two
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people are on the deed it's wise to seek
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advice to seek and figure out just
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exactly what you have absolutely okay no
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no do you need a will if you have all of
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your assets jointly definitely you still
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need to have a will because for it for
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example if you're the you have two joint
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owners and you are their surviving joint
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owner then that asset is in your
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individual name and you need to have the
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will to be able to transfer that at your
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death okay what about a power of
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attorney power of attorney is equally
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important so that if you become
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incapacitated during your lifetime your
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agent that you name under your power of
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attorney will be able to work with your
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joint owner and if you're the survivor
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as the sole owner to be able to either
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sell that asset or have access to it
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okay so every now and again it will
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happen that my client will come in and
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she will say well I have set up a couple
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of joint accounts with my one daughter
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and I have two other children are there
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any risks about doing that is that a
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good idea a bad idea yeah so usually
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clients will say that because they want
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one child to be able to have immediate
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access to the funds in the event of
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their death
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but what they don't realize is that it
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could be completely contrary to their
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regular estate plan so if their estate
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plan is to give everything equally to
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the three children and they've named
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just one as the joint owner that one
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child could take those assets and not
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share them with the others so the joint
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nature of the account sort of trumps
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what's in the will so that client would
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that clients child would get that asset
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to the exclusion of the other two even
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if the will says to divide everything in
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absolutely because that asset does not
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go through probate so the will does not
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control it okay well thank you Sammy
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this has been very informative you're
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welcome thank you
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you
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