The Weekly Scenario: Joint Funds & Estate Assets

7/22/15

Steve Shane, Principal

Question: My father purchased a Rolex watch with joint (marital) assets two years ago. He passed away and I (daughter) am the Personal Representative of his estate. I believe the watch is an estate asset. However, my step-mother refuses to return the watch to me so I can safeguard the watch along with the other estate assets. Should the watch be listed as part of the estate?

Answer: Yes, I would recommend that the watch be listed as part of the estate. In fact, the probate court should order your step mother to return the watch. There are cases which provide that when a joint account holder withdraws funds from a bank account that is held as a joint tenancy with the right of survivorship, it terminates the joint tenancy nature of the funds and severs the right of survivorship as to the funds withdrawn.

Once funds are withdrawn from a joint bank account, the funds become the separate property of the individual withdrawing the funds. When the watch was purchased then, it was really purchased with separate funds.

Comment: If you want assets purchased with joint funds to retain their joint tenancy one possibility is to declare that intention in writing (a written document may be utilized for highly valuable assets to avoid future estate litigation).

If you have any questions or would like more information please contact Steve Shane at: sshane@offitkurman.com | 301.575.0313.

ABOUT STEVE SHANE

Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.

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