It was a simple, straightforward legal question:
"What is better for my husband and I – to have our house, checkbook and savings accounts designated 'John or Jane Doe,' or 'John and Jane Doe?'"
The answer is equally simple and straightforward, assuming a marriage that envisions upon death the instant transfer of an asset from the deceased spouse to the surviving spouse: Jointly owned assets should read "John or Jane Doe."
The "or" identifies the husband and wife as "joint tenants," owning the asset in "joint tenancy." It means that each spouse owns an "undivided" interest in the home, the bank account, the auto or other property they choose to co-own.
Upon the death of one, her or his share automatically and immediately vests in the survivor, without the need for probate or any other legal documentation of transfer. In such cases the presentation of a certified death certificate is all that is required for the bank or mortgagee to remove the name of the deceased partner.
On the other hand, if the asset bears the designation "John and Jane Doe," each person owns a percentage interest in the property. They are legally known as "tenants in common," each owning a percentage interest in the property. Usually the property is held on a 50-50 basis, but not necessarily. Ownership can be allocated on whatever basis agreed to.
Upon death, each takes their respective interest with them, not to the grave, but to their estate, subject to probate and transferred to persons designated in a will, or if no will, to persons designated by statute through "intestate succession."
In some states there is a third form of joint ownership known as "tenancy by the entireties," and referred to as "T by E." This form of ownership is reserved exclusively for husbands and wives in the joint ownership of a home. Typically, it prevents levy or attachment unless both spouses owe money to a creditor other than the federal government.
"Joint tenancy" is the prevailing and most recommended type of joint ownership among spouses. But, a caution: it carries risk. Since ownership is "undivided," and ownership is designated "or," either party can "empty the account" or otherwise fully consume the asset.
Make certain you trust your fellow "joint tenant."
Pro bono legal information and advice is available to persons 55 and older through the USD Senior Legal Helpline, 1-800-747-1895; firstname.lastname@example.org. Opinions solely those of the author and not The University of South Dakota.