Joint Tenancy With Right of Survivorship
Joint Tenancy With Right of Survivorship
After my grandmother passed in 2018, my mom set up a joint tenancy with right of survivorship (JWROS) brokerage account with the owner being my mom, sister, and myself.
A few questions:
1) Besides avoiding probate, was there any advantage to setting up this account in this manner? (My sister and I have no need/want for this money.)
2) After my mother passes, is there a step-up in basis in this type of account? Nobody has contributed to this account since it was opened.
3) The account is currently worth around $100K with $20K of gain and 20+ funds she doesn't need/want. I'm currently consolidating all of her accounts and simplifying her portfolio's asset allocation to more of a 3-4 fund approach as she prepares for retirement in a few years. My current plan was to have my mom sell off the funds annually to the top of the 0% capital gains tax bracket and repurchase in her TOD brokerage account. My sister and I do not want any tax liability and it appears that the tax liability for my sister and I can be controlled in this manner and as she sells the funds, she will be the one that files the "gain" on her tax return. Does this sound reasonable/accurate?
Additional info is that my mom will be in the 10-12% tax bracket in her retirement so will have room to tax gain harvest, whereas my sister and I are currently in the 24% marginal tax bracket. Thanks!
A few questions:
1) Besides avoiding probate, was there any advantage to setting up this account in this manner? (My sister and I have no need/want for this money.)
2) After my mother passes, is there a step-up in basis in this type of account? Nobody has contributed to this account since it was opened.
3) The account is currently worth around $100K with $20K of gain and 20+ funds she doesn't need/want. I'm currently consolidating all of her accounts and simplifying her portfolio's asset allocation to more of a 3-4 fund approach as she prepares for retirement in a few years. My current plan was to have my mom sell off the funds annually to the top of the 0% capital gains tax bracket and repurchase in her TOD brokerage account. My sister and I do not want any tax liability and it appears that the tax liability for my sister and I can be controlled in this manner and as she sells the funds, she will be the one that files the "gain" on her tax return. Does this sound reasonable/accurate?
Additional info is that my mom will be in the 10-12% tax bracket in her retirement so will have room to tax gain harvest, whereas my sister and I are currently in the 24% marginal tax bracket. Thanks!
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Re: Joint Tenancy With Right of Survivorship
I think avoiding probate is the biggest draw. I believe JTWROS gives each person 100% rights to all the money, where Joint Tenants In Common gives proportional. So the fluid joint ownership of JTRWOS has benefits and risks, generally more common among spouses and JTIC more common with say business partners .1) Besides avoiding probate, was there any advantage to setting up this account in this manner? (My sister and I have no need/want for this money.)
I would ask your broker, I think the rules are different when the joint owner is not a spouse.2) After my mother passes, is there a step-up in basis in this type of account? Nobody has contributed to this account since it was opened.
Yes I believe that’s right if she’s the “primary” of the JTWROS, but maybe check with your broker or a CPA. It could be better to leave it alone and have her start anew in her TOD with the 3-4 fund portfolio.3) The account is currently worth around $100K with $20K of gain and 20+ funds she doesn't need/want. I'm currently consolidating all of her accounts and simplifying her portfolio's asset allocation to more of a 3-4 fund approach as she prepares for retirement in a few years. My current plan was to have my mom sell off the funds annually to the top of the 0% capital gains tax bracket and repurchase in her TOD brokerage account. My sister and I do not want any tax liability and it appears that the tax liability for my sister and I can be controlled in this manner and as she sells the funds, she will be the one that files the "gain" on her tax return. Does this sound reasonable/accurate?
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Re: Joint Tenancy With Right of Survivorship
On second review, matters of cost basis, capital gains tax (including whether *you are triggered by any sell), appear more complicated in a JTWROS when the owners are not spouses.
May wish to consult with a CPA before proceeding with any move. Good luck.
May wish to consult with a CPA before proceeding with any move. Good luck.
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Re: Joint Tenancy With Right of Survivorship
OP,
It I will be much more effective if the account was in your Mom’s name and you and your sister were bennificiaries on the account. This avoids probate and still allows both of you to take advantage of a step-up on basis and avoid Capital Gains taxes.
It’s not too late to make the change but you may have to open this as a new account and transfer in the money or securities.
WoodSpinner
It I will be much more effective if the account was in your Mom’s name and you and your sister were bennificiaries on the account. This avoids probate and still allows both of you to take advantage of a step-up on basis and avoid Capital Gains taxes.
It’s not too late to make the change but you may have to open this as a new account and transfer in the money or securities.
WoodSpinner
WoodSpinner
Re: Joint Tenancy With Right of Survivorship
The IRS treats the money in the joint account as belonging to the person who contributed the original funds. If either party withdraws more than they put in, it's treated as a gift. When she dies her portion would receive the step up.
Re: Joint Tenancy With Right of Survivorship
This is what I was going to recommend also.WoodSpinner wrote: ↑Sat Oct 23, 2021 6:37 pm OP,
It I will be much more effective if the account was in your Mom’s name and you and your sister were bennificiaries on the account. This avoids probate and still allows both of you to take advantage of a step-up on basis and avoid Capital Gains taxes.
WoodSpinner
Re: Joint Tenancy With Right of Survivorship
Thanks all for the replies. According to my mom, my grandmother's adviser was pretty adamant about setting up a JTWROS account, but it confounds me. If I had been a little more financially literate at the time I would've nixed that or at least moved funds ASAP before there was any capital gain on that account. I would ask the adviser his reasoning, but he has since retired.
Re: Joint Tenancy With Right of Survivorship
Not all advisors are able to see the whole picture.azcats22 wrote: ↑Sat Oct 23, 2021 8:01 pm Thanks all for the replies. According to my mom, my grandmother's adviser was pretty adamant about setting up a JTWROS account, but it confounds me. If I had been a little more financially literate at the time I would've nixed that or at least moved funds ASAP before there was any capital gain on that account. I would ask the adviser his reasoning, but he has since retired.
I'd tell your mom to just withdraw it and open a new account. That's probably the easiest way to end it.
Re: Joint Tenancy With Right of Survivorship
What if one child predeceases her?
Re: Joint Tenancy With Right of Survivorship
I would be very careful with any JTWROS when the owners are not spouses.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
Re: Joint Tenancy With Right of Survivorship
Thanks for the input. It's definitely an "&" account. My mom is in a low income year so should be able to sell the majority of the account, tax gain harvest at 0%, and then repurchase in a new TOD account.Shaneman wrote: ↑Sat Oct 23, 2021 9:31 pm I would be very careful with any JTWROS when the owners are not spouses.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
As the first person on the account, all dividends have been reported on her taxes which is more ideal as she has been helping with the grandkids rather than working. 1099-Div is reported only to the Recipient's Name (my mom) so we should be able to stay out of any tax liability.
"Should" is never ideal!
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Re: Joint Tenancy With Right of Survivorship
Note, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.azcats22 wrote: ↑Sun Oct 24, 2021 9:56 amThanks for the input. It's definitely an "&" account. My mom is in a low income year so should be able to sell the majority of the account, tax gain harvest at 0%, and then repurchase in a new TOD account.Shaneman wrote: ↑Sat Oct 23, 2021 9:31 pm I would be very careful with any JTWROS when the owners are not spouses.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
As the first person on the account, all dividends have been reported on her taxes which is more ideal as she has been helping with the grandkids rather than working. 1099-Div is reported only to the Recipient's Name (my mom) so we should be able to stay out of any tax liability.
"Should" is never ideal!
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
WoodSpinner
Re: Joint Tenancy With Right of Survivorship
A transfer in kind does not trigger a taxable event.azcats22 wrote: ↑Sun Oct 24, 2021 9:56 amThanks for the input. It's definitely an "&" account. My mom is in a low income year so should be able to sell the majority of the account, tax gain harvest at 0%, and then repurchase in a new TOD account.Shaneman wrote: ↑Sat Oct 23, 2021 9:31 pm I would be very careful with any JTWROS when the owners are not spouses.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
As the first person on the account, all dividends have been reported on her taxes which is more ideal as she has been helping with the grandkids rather than working. 1099-Div is reported only to the Recipient's Name (my mom) so we should be able to stay out of any tax liability.
"Should" is never ideal!
Re: Joint Tenancy With Right of Survivorship
So long as mother is the only person who put money into the account, there is no transfer to a third party.WoodSpinner wrote: ↑Sun Oct 24, 2021 11:11 amNote, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.azcats22 wrote: ↑Sun Oct 24, 2021 9:56 amThanks for the input. It's definitely an "&" account. My mom is in a low income year so should be able to sell the majority of the account, tax gain harvest at 0%, and then repurchase in a new TOD account.Shaneman wrote: ↑Sat Oct 23, 2021 9:31 pm I would be very careful with any JTWROS when the owners are not spouses.
Would the account be titled using the conjunction "and" or "or"?
Sally Smith & Bob Smith & Mary Smith JTWROS
or
Sally Smith or Bob Smith or Mary Smith JTWROS
If it is titled using the word "and" it requires all living people to sign for withdrawals or even changing the bank account where dividends should be deposited to. Along with the signature you will need a Medallion Guarantee for each person.
Today you all get along but you never know what happens in 5, 10 or 20 years from now. If the JTWROS uses the word "and" then everyone must sign to do anything with the account.
If titled using the word "or" one listed on the account can cash out the account.
I feel using beneficiaries, TOD, Totten Trust are the simpler and the smarter way to go and all bypass probate. Even better would for a revocable living trust but this will cost a couple of grand.
As the first person on the account, all dividends have been reported on her taxes which is more ideal as she has been helping with the grandkids rather than working. 1099-Div is reported only to the Recipient's Name (my mom) so we should be able to stay out of any tax liability.
"Should" is never ideal!
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
- WoodSpinner
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Re: Joint Tenancy With Right of Survivorship
Lee,Lee_WSP wrote: ↑Sun Oct 24, 2021 11:47 amSo long as mother is the only person who put money into the account, there is no transfer to a third party.WoodSpinner wrote: ↑Sun Oct 24, 2021 11:11 am
Note, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
WoodSpinner
Re: Joint Tenancy With Right of Survivorship
I agree it's confusing, but no, no actual transfer was made yet.WoodSpinner wrote: ↑Sun Oct 24, 2021 5:08 pmLee,Lee_WSP wrote: ↑Sun Oct 24, 2021 11:47 amSo long as mother is the only person who put money into the account, there is no transfer to a third party.WoodSpinner wrote: ↑Sun Oct 24, 2021 11:11 am
Note, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
If they ever exercised the right to withdraw, a transfer is made at that point.
It's like an unexcercised option.
Re: Joint Tenancy With Right of Survivorship
WoodSpinner/Lee,Lee_WSP wrote: ↑Sun Oct 24, 2021 6:39 pmI agree it's confusing, but no, no actual transfer was made yet.WoodSpinner wrote: ↑Sun Oct 24, 2021 5:08 pmLee,Lee_WSP wrote: ↑Sun Oct 24, 2021 11:47 amSo long as mother is the only person who put money into the account, there is no transfer to a third party.WoodSpinner wrote: ↑Sun Oct 24, 2021 11:11 am
Note, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
If they ever exercised the right to withdraw, a transfer is made at that point.
It's like an unexcercised option.
It seems like such a strange account designation to setup (JTWROS). My mom may need the money. My sister and I don't.
Ideally what I am after is for her to be able to combine it with her TOD brokerage account so that she can withdraw as needed during retirement in a few years and for us to be off the account entirely.
Perhaps I'm overthinking this situation and just need to transfer the JTWROS (without trying to figure out how to change the designation) over to Vanguard with her other accounts and drawdown this account first as needed annually to meet spending needs. az
Re: Joint Tenancy With Right of Survivorship
Joint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spouses. They have developed much better alternatives these days.azcats22 wrote: ↑Mon Oct 25, 2021 8:46 pmWoodSpinner/Lee,Lee_WSP wrote: ↑Sun Oct 24, 2021 6:39 pmI agree it's confusing, but no, no actual transfer was made yet.WoodSpinner wrote: ↑Sun Oct 24, 2021 5:08 pmLee,Lee_WSP wrote: ↑Sun Oct 24, 2021 11:47 amSo long as mother is the only person who put money into the account, there is no transfer to a third party.WoodSpinner wrote: ↑Sun Oct 24, 2021 11:11 am
Note, she can simply transfer in-kind. No need to sell, repurchase and deal with Cap Gains.
Technically a Form 709 should be completed by you and your sister since it is a gift over $15,000. OTOH, your Mom should have done one as well when she set up the JTWROS account.
WoodSpinner
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
If they ever exercised the right to withdraw, a transfer is made at that point.
It's like an unexcercised option.
It seems like such a strange account designation to setup (JTWROS). My mom may need the money. My sister and I don't.
Ideally what I am after is for her to be able to combine it with her TOD brokerage account so that she can withdraw as needed during retirement in a few years and for us to be off the account entirely.
Perhaps I'm overthinking this situation and just need to transfer the JTWROS (without trying to figure out how to change the designation) over to Vanguard with her other accounts and drawdown this account first as needed annually to meet spending needs. az
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
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Re: Joint Tenancy With Right of Survivorship
Why would someone transfer in kind when transfer on death is available?Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pm
Joint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spouses. They have developed much better alternatives these days.
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Could you let me know, briefly, what other options you tend to suggest so that I can do some due diligence and discuss this with the lawyer who is drafting our will and POA.
Re: Joint Tenancy With Right of Survivorship
If you would like forum help with your particular situation, please start a new thread.prioritarian wrote: ↑Mon Oct 25, 2021 10:25 pmWhy would someone transfer in kind when transfer on death is available?Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pm
Joint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spouses. They have developed much better alternatives these days.
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Could you let me know, briefly, what other options you tend to suggest so that I can do some due diligence and discuss this with the lawyer who is drafting our will and POA.
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Re: Joint Tenancy With Right of Survivorship
I'm comfortable with my current plan but am (practically and intellectually) interested in a brief list of other mechanisms to see if there was one that I was unfamiliar with.
Re: Joint Tenancy With Right of Survivorship
Transfer on death does the same thing as JTWORS without the issues. It’s even available for cars and land in a handful of states. Whether it’s wise to begin with is a separate discussion.prioritarian wrote: ↑Tue Oct 26, 2021 12:47 pmI'm comfortable with my current plan but am (practically and intellectually) interested in a brief list of other mechanisms to see if there was one that I was unfamiliar with.
Re: Joint Tenancy With Right of Survivorship
Lee_WSP is talking about the specific case in this topic, and recommending to get rid of the already existing joint account by transferring its assets (in kind).prioritarian wrote: ↑Mon Oct 25, 2021 10:25 pmWhy would someone transfer in kind when transfer on death is available?Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pm
Joint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spouses. They have developed much better alternatives these days.
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Re: Joint Tenancy With Right of Survivorship
Think I'm understanding. It sounds like my mom can change the account to solely her name, but technically my sister and I should file an IRS Form 709 of 1/3 of the account value (approximately $33K) as it becomes a gift at that point since we are considered joint owners, and the gift is over $15K.Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pmJoint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spas it ouses. They have developed much better alternatives these days.azcats22 wrote: ↑Mon Oct 25, 2021 8:46 pmWoodSpinner/Lee,Lee_WSP wrote: ↑Sun Oct 24, 2021 6:39 pmI agree it's confusing, but no, no actual transfer was made yet.WoodSpinner wrote: ↑Sun Oct 24, 2021 5:08 pmLee,
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
If they ever exercised the right to withdraw, a transfer is made at that point.
It's like an unexcercised option.
It seems like such a strange account designation to setup (JTWROS). My mom may need the money. My sister and I don't.
Ideally what I am after is for her to be able to combine it with her TOD brokerage account so that she can withdraw as needed during retirement in a few years and for us to be off the account entirely.
Perhaps I'm overthinking this situation and just need to transfer the JTWROS (without trying to figure out how to change the designation) over to Vanguard with her other accounts and drawdown this account first as needed annually to meet spending needs. az
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Re: Joint Tenancy With Right of Survivorship
The IRS does not view it as a completed gift and I'm unaware of any states which would recognize your ownership of any of the funds solely because she added you to a joint brokerage or bank account.azcats22 wrote: ↑Tue Oct 26, 2021 2:35 pmThink I'm understanding. It sounds like my mom can change the account to solely her name, but technically my sister and I should file an IRS Form 709 of 1/3 of the account value (approximately $33K) as it becomes a gift at that point since we are considered joint owners, and the gift is over $15K.Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pmJoint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spas it ouses. They have developed much better alternatives these days.azcats22 wrote: ↑Mon Oct 25, 2021 8:46 pmWoodSpinner/Lee,Lee_WSP wrote: ↑Sun Oct 24, 2021 6:39 pmI agree it's confusing, but no, no actual transfer was made yet.WoodSpinner wrote: ↑Sun Oct 24, 2021 5:08 pm
Lee,
I bow to your expertise, but it does seem counter-intuitive. Isn't the creation and funding of an account with JTWROS by the Mom with her 2 daughters equivalent to a gift to the 2 daughters?
WoodSpinner (always learning)
If they ever exercised the right to withdraw, a transfer is made at that point.
It's like an unexcercised option.
It seems like such a strange account designation to setup (JTWROS). My mom may need the money. My sister and I don't.
Ideally what I am after is for her to be able to combine it with her TOD brokerage account so that she can withdraw as needed during retirement in a few years and for us to be off the account entirely.
Perhaps I'm overthinking this situation and just need to transfer the JTWROS (without trying to figure out how to change the designation) over to Vanguard with her other accounts and drawdown this account first as needed annually to meet spending needs. az
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Different question if you had actually withdrawn the funds.
Re: Joint Tenancy With Right of Survivorship
That makes sense! Thank you again for your input. azLee_WSP wrote: ↑Tue Oct 26, 2021 2:37 pmThe IRS does not view it as a completed gift and I'm unaware of any states which would recognize your ownership of any of the funds solely because she added you to a joint brokerage or bank account.azcats22 wrote: ↑Tue Oct 26, 2021 2:35 pmThink I'm understanding. It sounds like my mom can change the account to solely her name, but technically my sister and I should file an IRS Form 709 of 1/3 of the account value (approximately $33K) as it becomes a gift at that point since we are considered joint owners, and the gift is over $15K.Lee_WSP wrote: ↑Mon Oct 25, 2021 9:29 pmJoint accounts and joint tenancy is not a robust estate planning mechanism. I pretty much never recommend it for non spas it ouses. They have developed much better alternatives these days.azcats22 wrote: ↑Mon Oct 25, 2021 8:46 pmWoodSpinner/Lee,
It seems like such a strange account designation to setup (JTWROS). My mom may need the money. My sister and I don't.
Ideally what I am after is for her to be able to combine it with her TOD brokerage account so that she can withdraw as needed during retirement in a few years and for us to be off the account entirely.
Perhaps I'm overthinking this situation and just need to transfer the JTWROS (without trying to figure out how to change the designation) over to Vanguard with her other accounts and drawdown this account first as needed annually to meet spending needs. az
Transfer the assets in kind to an account that is solely in her name.
Close the joint account.
Different question if you had actually withdrawn the funds.