| ALTERNATIVES TO CONSERVATORSHIP:
Co-Ownership of Property
Property, whether
it is real (land, houses, etc.) or personal (such as bank
accounts, motor vehicles or stock), may be owned by more
than one person. When real property is co-owned by more than
one person, an owner may not dispose of the property (such
as sell, mortgage, transfer) without the written agreement
of the other co-owner(s). Similarly, personal property may
be owned or titled in such a way that more than one signature
is required to sell the property, write checks, etc. Holding
land in joint tenancy (note) is a way of protecting and preserving
the property for the original owner’s use and reasonable enjoyment. So, if mom puts the home in joint tenancy with
one or more children, (s)he will not be able to sell the
home or borrow money using the home as collateral, unless
the co-tenants agree in writing to the transaction.
| WARNING: Placing
property in joint tenancy may be very dangerous. Joint
tenancy means that co-owners have a right to all of the
property. This means that jointly owned property, such
as a bank account, can be cleaned out by a co-owner or
may be attached by creditors to pay the debts of the
co-owner(s) even if it’s not their money. A lien
can also be placed on a house by a creditor and the house
ultimately sold to pay off debts of co-owner(s). Placing
property in joint tenancy may also invalidate a gift
in a will since joint tenancy property automatically
passes to the surviving co-owner(s) upon the death of
one of them, regardless of a contrary gift in the decedent’s
will. Finally, even if it is in mom’s best interest
to sell her home so that she can move to a more appropriate
setting, such as assisted living, if a joint tenant refuses
to agree to the sale, mom’s home cannot be sold.
Once a home is placed in joint tenancy, the only way
to remove the names of co-owners from the title is for
them to deed the home back to the original owner. If
they refuse, there is little that can be done to protect
the full value of the home for the original owner. |
Similarly, a bank
or credit union account may be set up so that it is owned
by more than one person. A joint account
could be useful if one person wanted to help another person
pay bills. The account could be set up so that either joint
tenant could sign checks or make withdrawals. Do not add
another person to this type of account unless that person
is trustworthy.
An account could also be set up so that all account transactions
required at least two signatures. The advantage of this second
type of account is that the funds in the account are protected
from being spent. As a result, one person cannot spend any
money unless the co-owner(s) of the account agrees to spend
the funds. For example, suppose a family is concerned about “dad” who
suddenly is spending large amounts of his life savings on
questionable purchases or investments. If
dad is agreeable,
the bank or credit union account(s) may be changed so that
the signature(s) of the other co-owner(s) is required for
all transactions. This would at least provide some oversight
of dad’s spending habits.
In order to give dad some
sense of independence, and especially if the co-owner(s)
lives in another town, dad should be allowed
to maintain a smaller bank account on his own in which funds
are deposited from the larger account on a weekly, bi-weekly
or monthly basis. The amount in dad’s own bank account
will depend on his needs and ability to manage smaller amounts.
So, for example, each month $300 is placed in dad’s
own account for him to use for expenses such as gas, food,
and entertainment. His bills and more major expenses are
paid from the joint account so that the other signatory will
have some oversight of the account.
The ownership of other
personal property, such as stock certificates, whole or universal
life insurance (which can be cashed in
for a certain amount of money) and motor vehicles may also
be changed so that they are co-owned in such a way that more
than one signature is required to dispose of the asset. To
change the ownership of stock and life insurance, contact
either a broker or the company directly. Contact New Mexico’s
Motor Vehicle Division for motor vehicle title changes. WARNING: If
a motor vehicle is in an accident, ALL owners will be sued,
so make sure the vehicle is well insured.
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