Did you know?: Joint - Gift of Beneficial Right of Survivorship

Mar 15, 2019 | Christos Koutsavakis


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The first entry in our Did you know? series addresses a new way to hand down your investment assets to your adult beneficiaries.

Imagine this scenario: the beneficiaries of your estate will be your adult children and you’d like your assets to pass over to them in a timely and tax-efficient manner upon your death.

 

In a nutshell: assets held inside a “Joint – Gift of Beneficial Right of Survivorship” (JGBRS) account would pass to your joint holders (let’s say they are your adult kids) seamlessly upon death, without having to go through the time-consuming probate process and be subject to probate taxes. While you are alive, the assets in the account belong solely to you as the primary account holder and the joint holders have no claim on the account – in fact, you don’t even have to tell them what is in it. Upon your death, the joint holders take ownership of the account, each with an equal claim on the assets. If there is only one joint holder, then that person would acquire all the assets.

 

One way this could really matter: you do not give up ownership of your assets until death. Placing assets into a normal joint account (not a JGBRS) would achieve the goal of a seamless handover of assets, and avoid probate – but you would give up ownership of a large portion of your assets at the time of funding the joint account, which may have tax consequences. Also, the joint holders would have a claim on their portion of the assets immediately. A JGBRS account, on the other hand, allows ownership of the account to remain with you. Should you change your mind, you have the freedom to move the assets back into a single-name account whenever you like, without the joint holders’ consent.

 

This is a generic example of a complex topic, which has limitations not described here. We recommend consulting your financial advisor to see if this strategy makes sense for you.

 

See also: Joint Ownership Accounts