What Happens to Jointly Held Assets When Someone Dies?
Upon the death of someone, it's the responsibility of family members to pay this individual's final expenses. This might include paying off credit card balances and other loans. The family must also decide what to do with a deceased person's personal property. However, if you share assets with a deceased individual, there are specific ways to manage these assets upon the death of a joint owner.
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What Are Joint Assets?
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Joint assets include any valuable thing that includes two or more names on the account. When opening a bank account or purchasing real estate, applicants can choose to put their name on the application or apply with another person. The other individual becomes a joint-borrower or co-borrower on loans, and a joint or co-account holder on financial accounts. With a joint account holder or borrower, the other individual is equally responsible for the account. This person can make decisions regarding the account, loan or property, such as withdrawing funds from a bank account or closing a bank account.
Financial Accounts
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If two people own a financial account together (checking, saving, retirement), the living account holder automatically gains sole ownership of the account upon the death of a joint account holder. Being a joint account holder is not the same thing as being an authorized user or signer on an account. An authorized user is someone added to an account by the primary account holder. Authorized users can access the account, but they don't own the account, nor can they make decisions regarding the account. Joint financial accounts have the word "or" between both names -- for example, John or Mary Jones.
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Real Estate Property
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In the case of joint real estate property, the surviving property owner only gains sole ownership of the property if the deed indicates, "as joint tenants with rights of survivorship." A couple may live in a home together for many years and share the financial responsibility. However, this act doesn't always indicate that the property is jointly held. What's more, if there isn't an "or" between both names on the deed, the property isn't jointly held. The surviving spouse or family member doesn't become the sole owner.
Considerations
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If there's any question regarding who inherits assets upon the death of someone, a probate court can review the situation and then make a final decision. Preparing a will facilities the situation because these documents indicate the individual(s) who will inherit bank accounts, investment account, retirement accounts and real estate property. A probate court will confirm the validity of a will, and then distribute assets as indicated by the will. If there's isn't a will and accounts are not jointly held, a probate court will determine a beneficiary for the deceased person's assets, most likely an heir.
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