Sometimes titling an asset in Illinois as jointly-held with another person is a great tool. Perhaps you are considering using the tool of “jointly-held” to avoid having to have a will or trust prepared.
After all, doing so has the nickname of a poor man’s will and can ostensibly save money up front. Whether that is a good choice for you with regard to any of your assets will depend on facts specific to you. There are some definite risks to consider, however.
You cannot leave joint property to a will beneficiary
You may want to avoid making your property joint if you anticipate being able to leave it to a different beneficiary via your will at the time of your death. This is because jointly held property that retains the right of survivorship will become 100 percent that of your co-owner when you die. It will not become part of your estate and will not pass by the terms of your will. So, consider if the co-owner is ultimately the person you want to benefit from the property.
You lose control over who gets property when co-owner dies
Also, the co-owner that fully owns the property when you die has no obligation to leave to anyone you may have previously decided you wanted it to go to once you both passed away. This can be particularly contrary to your wishes should your co-owner be unrelated to you at all.
It may be more likely that he or she will leave the property at death to members of that owner’s family and not yours. Of course, any result will depend on the specifics of your situation and your relationship.
Your executor cannot use jointly held bank account funds
Another consideration involves your executor’s cash liquidity needs when you pass. There will likely be debts and ongoing bills requiring payment for quite some time after you die.
The executor would typically use your bank account to cover these debts until the settling of the estate is complete. However, if you make your bank account jointly held, those funds will pass entirely to the co-owner. They will not be part of the estate or available for use by your executor.
Your executor may be unable to readily pay important bills of your estate. If that occurs, the executor may have to sell assets intended to go elsewhere, to raise funds to pay your bills and debts.
Before creating joint ownership in any of your assets, you would be best served by reviewing all of the potential ramifications and considering other options.