The years leading up to retirement usually prompt a pause to take stock of the assets you’ve accumulated and where you want them to go after you’re gone.

Upon opening financial accounts, the asset title is automatically established in your name as the person who signs the account agreement. You’re also often asked to name a beneficiary. This is the person who will inherit the account when you pass away. It avoids the often lengthy and costly probate and overrides a will or trust.

Joint titling allows two owners for a financial account, often used by spouses or parent-child pairs. However, if the account is intended for one person to own and another to inherit, joint titling can introduce risks.

Two common methods of joint titling for financial accounts

Joint Tenants with Right of Survivorship (JTWROS) — co-owners where the surviving owner automatically inherits the account.

Tenants in Common (TIC) — co-owners where a deceased owner’s share passes to their estate rather than the co-owner.

Transferring assets using joint titling

While it may seem like JTWROS is an easy way to pass an asset to a spouse or other party if something happens to you, note that it’s not the same as assigning a beneficiary.

Key benefits of JTWROS

No wait: The account automatically transfers to the surviving owner(s) when they file the required paperwork.

Cost-effective: Setting up JTWROS on an account is free and doesn’t require paying an estate lawyer or administrative fees.

Avoids probate: Ownership automatically transfers to the surviving owner without going through a public probate court process, unlike transferring it via a will.

Can help with incapacity planning: If you become incapacitated, the co-owner can immediately access and use the account funds to cover bills and living expenses for you.

Key trade‑offs of JTWROS

Loss of control: Your co-owner has immediate access to withdraw or spend the entire asset without your permission.

Exposure to creditors: If your joint owner gets sued or faces bankruptcy, the asset could be subject to seizure by creditors to settle debts and lawsuits.

Considered a marital asset: If your joint owner is not your spouse and goes through a divorce, the funds in the account could be considered your co-owner’s marital asset and subject to asset division.

Medicaid or subsidy disqualification: The asset is automatically counted as part of each co-owner’s total assets, which could bump an owner above the threshold for receiving health insurance subsidies or qualifying for Medicaid.

Estate planning mishaps: Joint ownership overrides wills and trusts, so the co-owner will automatically inherit the entire account, which could leave out family members. A beneficiary can be assigned to the account, but they will not inherit it until both owners pass away.

Tax complications: Adding a co-owner could be considered a gift, potentially creating gift tax liability. Additionally, the co-owner could be subject to higher taxes on the assets since only your portion of the assets qualifies for a step-up in cost basis when you die.

Is joint titling right for you? Consider these factors

1) Strategic planning considerations

• A will: Allows you to name who inherits the assets that pass through your probate estate. Note that the asset will have to go through probate court.
• Revocable living trust: Offers more controlled beneficiary assignments with specific direction. Note that this will incur the cost of an estate-planning attorney to draft.
• Other methods: You can do a Payment/Transfer on Death (POD/TOD) arrangement or a beneficiary designation to assign a beneficiary to receive the asset at death. It’s no cost and will override a will or trust. 

2) Emotional considerations

• Co-owner mistrust: Your co-owner doesn’t need your permission to spend down, give away or sell the asset, which could create friction and trust issues in the relationship.
• Rivalry among beneficiaries: Assigning joint ownership to a child may create resentment among other children. It could also cause an imbalance in the distribution of assets when you pass, since that one child will receive full ownership of the account.
• Family tension: If you remarry and jointly title assets with a new spouse, it could raise concerns among your children about future inheritances.
• Stress: You may constantly worry about your co-owner’s actions, knowing the asset could be taken in a lawsuit or liquidated without your consent.
• Difficult removal: Removing a co-owner can also be awkward and damaging to the relationship.

How an Edward Jones financial advisor can help

Because joint titling as JTWROS involves important trade‑offs, it’s best to consult your Edward Jones financial advisor. They can help assess if this strategy meets your goals and how it fits into your estate planning.

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^{The information provided is for educational purposes only and is not intended as legal, tax or estate-planning advice. The legal, tax and estate-planning consequences of joint ownership, beneficiary designations, trusts and other transfer strategies can vary significantly based on individual circumstances and state law. Before implementing any estate-planning strategy, consult with qualified legal and tax professionals regarding your specific situation. Edward Jones and its financial advisors do not provide legal or tax advice.}