JTWROS Benefits & Pitfalls

 

JTWROS: Benefits & Pitfalls – Between an Elderly Parent and Adult Child

Clients ask, Does it make sense to open a Joint Investment Account that is Joint Tenants with Right of Survivorship (JTWROS) with an elderly parent.

Benefits

• Convenience: Adult child can help manage the investments and finances
• Ease of estate administration: Upon passing, the Adult child becomes sole owner of those assets
• Avoid probate :The joint assets do not form part of the estate thereby avoiding probate fee

Pitfalls

• Loss of control :The Adult child has full access to the assets
• Debt: If the Adult child has debt, the assets could be exposed to creditors
• Marital breakdown :A portion of the joint assets could be considered part of the division of assets

 

Speak with a lawyer and/or accountant about your specific situation and ensure everything is documented