Joint Tenancy Pitfalls

There are many ways to own your assets. When you die, it is only natural that you want your family to share in the bounty of your hard work. As a way to simplify the transfer process and avoid probate, you may be tempted to add a child or other relative to the deed or bank account, which is known as joint tenancy.  However, while joint tenancy delivers a lot of potential benefits, it may also be masking some dangerous pitfalls.

 

Under joint tenancy, when one owner dies, the other owner(s) inherit the deceased owner’s share of the property proportionately. Its benefits are specific: ownership is transferred automatically without entering probate. Because the property is transferred outside of probate, it is possible to keep this inheritance out of the clutches of creditors of your estate.   On the surface, this seems like a smart way to streamline the inheritance process, sidestep creditor baggage, and bureaucratic charges. But the risks may outweigh the benefits.

 

The Price You May With Joint Tenancy

One of the main problems with joint tenancy is that when you enter into this kind of agreement, you open yourself up to additional liability. When you agree to a joint tenancy, you put your assets on the hook for the other owners’ creditors, ex-spouses and flights of fancy.

 

Another problem with joint tenancy, as it relates to real estate, is that there are now multiple owners of the property. You must now get the approval of the other owners if you would like to mortgage, refinance, transfer, or sell the property. It does not matter if you are the only one who is occupying the property or paying the expenses, by adding additional people as owners, you are giving away control.

 

With respect to any bank accounts, once you add an additional owner, that individual, as an owner, has the right to go to the bank and withdraw whatever money is in the account. The bank is merely going to make sure that the individual is listed on the account and will freely turn over your money to him or her. If a joint owner’s creditor serves the bank with a garnishment order, they can also seize the money in the account, even if the joint owner was only added to help avoid probate.

 

Disinheriting Loved Ones

While joint tenancy can have some impacts on you, it can also disrupt your estate plans because instead of property getting handed down, it’s handed over. For example, if someone with children remarries and a new spouse is added to the deed as a joint tenant, that new spouse will inherit the property, not the kids or grandkids. Because there’s a new spouse involved, the new spouse’s family will then be the ones to inherit upon his or her death, leaving the whole ‘branch’ of the original family may be disinherited—and not always intentionally!

 

Questions? Give Us a Call

Although there are some advantages to a Joint Tenancy, don’t let simplicity or speed be your only measures. Give us a call so we can discussing all of your options and tailor a solution that will best fit your needs. For New York City, call us at 212-537-9190 or for New Jersey, please call 908-403-8608 or click here to Contact Us  

What Happens To Your Frequent Flyer Miles If You Die?

If you’re a frequent flyer, you may wonder what will happen to your accumulated miles if you die. They could be worth thousands of dollars, so you probably don’t want them to just disappear, but some airline policies say that’s exactly what will happen.

The law doesn’t consider airline miles assets that can be bequeathed directly to heirs, but there are still some steps you can take to help ensure your miles live on. It all starts with examining the airline policies in question.

Airline Policies Regarding the Transfer of Frequent Flyer Miles

Some relevant policies include:

  • American Airlines AAdvantage: “Neither accrued mileage, nor award tickets, nor status, nor upgrades are transferable by the member (i) upon death . . . . However, American Airlines, in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce decrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.”
  • Delta Airlines SkyMiles: “Except as specifically authorized in the Membership Guide and Program Rules or otherwise in writing by an officer of Delta, miles may not be . . . transferred under any circumstances, including . . . upon death. . . ”
  • Southwest Airlines Rapid Rewards: “Points may not be transferred to a Member’s estate or as part of a settlement, inheritance, or will. In the event of a Member’s death, his/her account will become inactive after 24 months from the last earning date (unless the account is requested to be closed) and points will be unavailable for use.”
  • United Airlines MileagePlus: “In the event of the death or divorce of a Member, United may, in its sole discretion, credit all or a portion of such Member’s accrued mileage to authorized persons upon receipt of documentation satisfactory to United and payment of applicable fees.”

As you can see, policy terms vary, and they may vary even further depending on your agent. Airfarewatchdog.com has found differences between written policies and what customer service representatives told them over the phone—a discrepancy that played out in the story of Kathe Holmes, who successfully claimed her late husband’s Alaska Airlines miles with minimal effort and no additional fees, even though that seemed to go against official policy.

 

 

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How to Transfer Miles After Death

Although airline policies may say they don’t allow miles transfers after death, employees often have the discretion to approve them. Still, there’s no sure way to know whether your airline will work with your loved ones regarding the transfer of your miles.

One way to better ensure your miles get transferred is to include a provision in your will that makes your wishes clear. This step is especially important if your airline requires a copy of a will as documentation, but it can be helpful in any event.

Another option is to leave your account number, login and password to the person you would like to use your miles. Some airlines permit such transfers and usage of miles after the account holder’s death.

In either scenario, you should talk to your loved ones about your intentions so they know to pursue the issue in your absence. Also, if you’re the one trying to claim miles of a deceased person, you should understand the airline’s policies before offering information about the account holder’s death. The account could be cancelled immediately, leaving you with no recourse.

Final Thought on Frequent Flyer Miles

Frequent flyer policies can change at the whim of the airlines even as you are living, so another idea to keep in mind is to use the miles now and create experiences with your loved ones rather than plan to pass the miles on later. In doing so, you can be absolutely sure your miles aren’t lost; an added bonus is that you can also share moments none of you will ever forget.

If you have any concerns about frequent flyer miles, contact our office, and always be sure to include all your assets, even your airline miles accounts, when discussing wills, trusts, and estate plans with your attorney.