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When making decisions regarding your property after you are gone, there are many options to consider. One of those considerations is whether to hold property in joint tenancy with a spouse or other individual, such as a child or a friend. Joint tenancy is where two or more people own property or accounts together and when one of the joint tenants passes away, the property goes directly to the remaining tenants. Joint tenancy is a common way that people try to avoid probate or other traditional estate planning. However, joint tenancy is not a silver bullet. In fact, under some circumstances it causes negative results. 

Reasons People May Choose Joint Tenancy

The biggest reason why people choose joint tenancy over other estate options is because they are hoping that they can avoid probate for little or no cost. Probate is a court process that decides how the property of a person that has recently died will be distributed. Probate court can be expensive and takes time. Another reason why some people choose joint tenancy is because all parties involved with the property share in the positive things that ensue. One being that if one person dies, then the other party or parties immediately have ownership of that property. Some people like joint tenancy because it takes away the hassle of thinking about who to give certain assets. Under some circumstances, joint tenancy is a good solution that can be accomplished relatively easily.

joint tenancy

Why Joint Tenancy Can Be Problematic

Joint tenancy has certain attractions and advantages, but there are several reasons why it can be problematic and is not suitable in every scenario.

Probate Can Only Be Avoided For So Long

One of the biggest issues with joint tenancy is that while it avoids probate for when the first tenant passes away, upon the death of the last tenant the property will have to be probated. This causes major complications for the family and other potential heirs of the joint tenants because at this point, it means they have to pay much more for probate and figure out how to distribute the estate.

The First Person To Die Has No Say In Their Estate Distribution 

Another issue with joint tenancy is that the first person to die does not have a say in what happens with their property after their death. Because the property goes directly to the joint tenant, the joint tenant has full control over the property. This means that sometimes potential heirs could be completely left out of the estate at a surviving joint tenant’s sole discretion. 

For example, a man, who has joint tenancy with his wife, passes away. His wife inherits his possessions. Eventually she remarries and when she dies her inheritance goes to her new husband. In this scenario, say that the original man had a nephew who he loved like a son. The nephew would be completely left out of the estate. Without a joint estate, the man could have left some of his inheritance to his nephew.

Joint Tenancy Causes Tax Issues

After the first joint tenant passes away, there is not usually a taxable event. However, after the death of the last joint tenant, estate taxes can reduce the holdings that the couple thought that they were leaving behind. This is because the entirety of the property is in the survivor’s estate meaning that if the whole of the estate is more than $ 11.7 million then there will be federal estate taxes. And the amount is always changing–on January 1, 2022, that exemption will be cut in half so estates worth more than $5.85 million are subject to federal estate tax.

Joint Tenancy Could Create Gift Taxes

If joint tenants are not spouses, there are issues that could be created when one joint tenant passes away. When an aging relative or a parent makes a younger relative a joint tenant on their property or cash accounts, the IRS often sees these transactions as gifts, not estate planning strategies. There will be gift taxes that would be much higher than the cost of what it would have been paid for probate, often at the expense of the donor and sometimes at the expense of the person receiving the alleged gift.

Joint Tenancy Creates Exposure To Risks

One of the positives of joint tenancy was that each party enjoys the benefits of the property together. The negative side of this benefit is that you do not have full autonomy of your property. This means that you will not be able to sell or dispose of your property without your joint tenant’s consent. It also means that the share of the property that you do not control could be lost based on your joint tenant’s decisions. The property could be lost due to your joint tenants’ bad debts or bankruptcy, divorce, or lawsuits filed against your joint tenant.

Have Questions Regarding Joint Tenancy?

If you have questions regarding joint tenancy or want to find out more about other estate planning strategies, we have many resources available to you here at Stevenson Smith Hood Knudson P.C. We can  educate on the many options available, and will help you find the best plan for your estate and circumstances. Contact us today!

Filed Under: Attorneys, Estate Planning, Estate Planning

If you watch TV or read books, then you’ve often encountered wills. Wills, unlike trusts, are often presented in TV and books as something that causes friction between family members. To help you understand what wills are, this article will compare two common types of legal documents that are used in estate planning: wills and trusts. The goal is to help you better understand what each document does and when it should be used. 

The Similarities Between Wills and Trusts

Before discussing the key differences between wills and trusts, it will be useful to learn some of the similarities between the two different types of legal documents. 

Wills and trusts are both used in estate planning.

Wills and trusts are both used in estate planning. For example, a will outlines who will care for minor children (if you pass away having children who are minors). It also outlines what to do with belongings and who they should be given to. This outlining of “what goes to who” is similar to what trusts can do as well. 

Wills vs. Trusts: What You Need To Know

Wills and trusts require legal advice.

Both wills and trusts require legal advice. For example, a will requires someone who can fulfill the formal requirements as well as defining “what goes to who” after death. In the case of a trust, an experienced legal expert can ensure the documents are formally correct and accomplish your goals. 

Both wills and trusts also come in many different forms. Wills can be modified and customized. When it comes to trusts, there are revocable, irrevocable, and testamentary trusts. Even more so than wills, trusts can be customized in numerous ways. You will need to consult with a legal expert to find out what type of will or trust is right for your situation. 

The Differences Between Wills vs. Trusts

Wills and trusts mayboth accomplish division and distribution of property but they are, nevertheless, different. Here are some key differences between wills and trusts.

Wills require a probate court; trusts do not.

For a will to take effect requires a probate court. Probate courts make sure that the will is complete according to state law. It also makes sure that debts and other loans have been paid off before distributing the deceased’s property according to his or her wishes. Even with a will, no one has authority to distribute assets or spend money until the probate court appoints the personal representative, also called an executor. If there’s no will in place, a probate court will follow state laws to appoint a personal representative and distribute the assets. 

Trusts, on the other hand, do not require a probate court in order to take effect. Trusts can take effect immediately upon the creation, at death, or under various other circumstances. Trusts can be designed and customized to address your specific concerns, and accomplish your specific goals both for yourself and for your family.

Stevenson, Smith, Hood, Knudson P.C. Can Help You 

If you’re not sure of the differences between trusts and wills, Stevenson, Smith, Hood, Knudson P.C. can help you understand these key differences better and determine which option is the best for you. Wills and trust come in different forms: you should have a knowledgeable attorney who can design an estate plan to meet your needs, whatever those may be. 


For more information about wills and trusts, contact us at 801-821-5775. We’ll answer any questions that you may have. You can also contact us here.

Filed Under: Attorneys, Estate Planning, Estate Planning, Trusts, Wills

DIY wills are incredibly prevalent on the internet. It can be tempting to just download a premade template and create your will yourself in order to save some money. However, there are many risks that are associated with using DIY wills rather than creating your will with professional guidance. In most cases, these risks can outweigh the expenses of working with an attorney to create the ideal will for your situation. At Stevenson Smith Hood Knudson, we can provide superior estate planning to meet all of your needs. Here are a few of the dangers of DIY wills. 

Failure to Distribute Entire Estate

When you use a DIY will, it is possible that you will forget to include certain assets of your estate. This can cause confusion when the estate is being distributed. When you work with a professional, you can be confident that your will addresses all of your estate. 

Not Updated with Changing Laws

Laws, especially tax laws, seem to change and evolve over time. DIY wills circulating on the internet are usually not updated to meet these changes. This can cause the will to be ineffective or not meet your goals. An attorney can help to provide you with guidance toward creating a will that considers the current state of the law. 

Not Specific to Your State

Dangers of DIY Wills

Laws regarding estate planning and distribution will vary depending on the state. A generic DIY will won’t necessarily address these differences. This can be extremely detrimental to the efficacy of your will. It is essential to work with an estate planning attorney that is knowledgeable about the specific laws in your area or the area where the estate is located. 

Failed Document Interaction

A comprehensive estate plan often includes several documents to ensure that all kinds of factors are addressed. There are enough risks with trying to complete a single document on your own. When you use multiple documents, these risks are often exacerbated. It is important to ensure that each of your documents works together to develop a comprehensive estate plan that will best meet your needs. 

Improper Execution

The way that you sign your will impacts whether the will is valid or not. There are many steps that have to be taken to ensure the will is valid. You have to sign your will in the appropriate locations, as well as have the document witnessed and notarized. An attorney will ensure that your will is executed properly.  

Failure to Plan for Alternate Scenarios

There are many things that can impact your estate plan and will. When you work with an attorney, you will be better able to plan for alternate scenarios that can impact your estate distribution process. 

Lack of Personal Guidance

If you’ve never created a will before, you have no experience with the process. An estate planning attorney, however, has a great deal of experience in this process. When you work with our team, you can be confident that you will receive superior personal guidance to make the best plan for your own situation. 

Delayed Surfacing of Problems

The major risk of DIY wills is that problems won’t surface until it is too late to resolve them. Your estate won’t be distributed until after your passing, so any problems with this distribution will only be apparent at that point. This will leave your loved ones to bear the burden of resolving these problems. It is important to work with an experienced professional when you are creating your will. DIY wills can lead to serious problems with your estate distribution. When you work with our experts at Stevenson, Smith, Hood, and Knudson, you can be confident that you will create the ideal will and plan to meet your needs. For more information about our will-related services, contact us at Stevenson Smith Hood Knudson today.

Filed Under: Estate Planning, Estate Planning, Wills

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