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Tips for When You Get Hitched
It’s easy to add a new spouse’s name to assets you bring to a marriage, and there’s no gift-tax consequence between spouses when making the change, since husbands and wives can give unlimited amounts to each other without triggering federal taxes.However, joint ownership (technically called joint tenancy with right of survivorship) doesn’t make sense for all types of assets. Here are several recommendations on what to join and what to keep separate:
- Cars should not be owned jointly. If you put a car in both of your names and one of you has an accident that results in damages that exceed your insurance coverage, then your other jointly owned assets could be in jeopardy. So it’s best to keep all vehicles in individual names.
- The form of ownership doesn’t matter when it comes to annuities. It only matters who is designated as the beneficiary. If you own annuities jointly and your spouse dies, you don’t automatically become the sole owner of that annuity. Such “survivorship benefits” also don’t apply to life insurance and retirement plans.
- For practical purposes, it makes sense to jointly own household accounts, like checking and money market, so that either owner can access the accounts and have survivorship benefits. If stock certificates are held jointly, then two signatures are required to sell the stocks.
- Houses should generally be kept in both spouses’ names. This protects a surviving spouse from any kind of probate and ensures that one spouse can’t sell the home without the other’s consent.