Like people in a three-legged race, JTEN parties are bound to each other until one dies unless they end their shared JTEN ownership sooner
JTEN parties are tied to each other, like in a 3-legged race, until one dies or they stop the JTEN.

Does your name appear with someone on a bank or investment account? If so, you and the other people may be joint tenants with rights of survivorship (JTEN). Indiana law refers to people sharing a JTEN account as “parties.” This article discusses why people make JTEN accounts and some hidden JTEN headaches and heartaches.

WHY MAKE JTEN ACCOUNTS?

Many folks make JTEN accounts for when they get sick or die. They hope the other JTEN parties will help pay bills during their illness or after their death. Sadly, most of them don’t know they can get better results with a power of attorney (POA) without losing control of their money (see our POA articles at https://www.hawkinselderlaw.com/?s=Power+of+attorney or enter “power of attorney” in the search field at https://www.hawkinselderlaw.com/blog/ for more POA details).

The Four JTEN PROBLEMS

While JTEN accounts are great for happily married couples, they can cause four problems in other cases.

1. Control

A person gives up control by making a JTEN account because they can’t remove another party without their written consent. Any account party can sign checks and withdraw money. That may not be a problem if both account parties are on the “same page.” However, if the parties don’t agree, the other party can take all the money against the main party’s will. Although the main party can withdraw the money and open a new account, the main party can’t close the account without the other party’s consent. Also, if the bank charges fees because the account value is too small, both parties will owe 100% of the fees.

2. Beneficiaries’ Creditors

What if a JTEN party has debt problems? Can their creditors try to take the money to pay the debts? Creditors will fail if the main party proves they deposited all the money in the account. Still, the best way to win a fight is to avoid it. So, making a JTEN account with anyone other than your spouse is usually unwise.

3. Selfish Survivors

Good JTEN parties often pay more than their share of bills after the main party’s death. In contrast, selfish JTEN parties take their money without paying their share of the dead party’s bills.

4. Unintended Disinheritance

Suppose you and another JTEN party die in an accident, and the other JTEN parties live. If a dead JTEN party left the surviving children, the other JTEN parties would get the money, leaving nothing for the dead JTEN party’s children.

FINANCIAL SERVICE PROVIDERS’ ROLES

Bankers and Investment advisors should tell customers to get advice from an estate planning lawyer before making JTEN accounts with people not their spouses. Folks should also get legal advice before making others beneficiaries of IRAs, life insurance policies, and other accounts.

MORE INFORMATION

In a future article about choosing people to receive IRAs, life insurance policies, and other accounts, we will share more on concerns like these. Find more information about this and other topics at www.hawkinselderlaw.com/blog. You can also call us at 812-268-8777.

ABOUT THE AUTHORS

Jeff and Jennifer are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers, and active members of the Indiana State Bar Association and the Indiana Chapter of the National Academy of Elder Law Attorneys (NAELA). Jeff is also a member of the Illinois NAELA Chapter, a Fellow of the American College of Trust and Estate Counsel, and a member of the Illinois State Bar Association.

Both Hawkins are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois.

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