Understading Account Ownership Types in Estate Planning

When it comes to estate planning, many people focus on drafting wills and setting up trusts—but few realize how account ownership can have a significant impact on what happens to their assets after death. How you hold title to your bank accounts, real estate, and other property can override your will or trust entirely. That’s why it’s essential to understand the different forms of ownership—especially tenancy in common, joint tenants with rights of survivorship (JTWROS), and tenancy by the entirety—and how each affects estate planning.

Let’s explore these three common forms of ownership and why they matter.

1. Tenancy in Common

Definition: Tenancy in common allows two or more people to own an asset together, but each person holds a separate, distinct share of the property. These shares don’t have to be equal, and each co-owner can sell, gift, or bequeath their share independently.

Example: If three siblings own a vacation property as tenants in common, one might own 50%, while the others own 25% each. If one sibling dies, their share passes to their heirs or according to their will—not automatically to the surviving owners.

Estate Planning Implications:

• The deceased person’s share becomes part of their probate estate, which means it could be delayed by court proceedings.
• Beneficiaries can inherit the share even if they have no relationship with the surviving owners, potentially creating conflict.
• This form of ownership provides flexibility, but also carries a lack of survivorship protection.

2. Joint Tenants with Rights of Survivorship (JTWROS)

Definition: With JTWROS, two or more individuals own an asset equally, and when one owner dies, their share automatically passes to the surviving owner(s)—outside of probate.

Example: If a married couple owns a joint checking account with rights of survivorship, and one spouse dies, the other becomes the sole owner instantly.

Estate Planning Implications:

• Assets held this way do not go through probate, which can speed up access to funds and simplify estate administration.
• Ownership must be clearly designated—just having a joint account doesn't automatically mean it’s JTWROS.
• This arrangement is often used for married couples or trusted family members, but it’s crucial to understand that it overrides a will. Even if your will says one thing, a JTWROS asset will pass directly to the surviving owner.

3. Tenancy by the Entirety

Definition: This is a special form of ownership only available to married couples in certain states, including Missouri but not Kansas. It treats the couple as a single legal entity, and both spouses must agree to any transaction involving the property.

Example: A married couple in Missouri owns their family home as tenants by the entirety. If one spouse dies, the other automatically receives full ownership without probate.

Estate Planning Implications:

• Offers survivorship benefits like JTWROS—upon death, the surviving spouse inherits the property immediately.
• Provides strong asset protection—creditors of just one spouse typically can’t force the sale of the property.
• Because it’s not recognized in Kansas, couples living or owning property in both Missouri and Kansas need to be cautious and strategic.

Why Ownership Matters in Estate Planning

Understanding these distinctions is essential for several reasons:



1. It Affects Who Inherits

Ownership type can override your will or trust. For example, if you name your children in your will but hold all your accounts as JTWROS with one child, the others may be left out entirely.

2. It Impacts Probate

Assets that pass through survivorship (JTWROS or tenancy by the entirety) avoid probate, which can be time-consuming and expensive. This is often desirable, but it must be done intentionally and not by accident.

3. It Can Create Conflict

Unclear or unintended ownership structures can lead to disputes among heirs, especially in blended families or second marriages.

4. It Has Tax and Legal Consequences

Different types of ownership come with different tax implications, liability protections, and access rights. Consulting with an estate planning attorney can help you align your ownership choices with your overall goals.

Final Thoughts: Review and Align Ownership with Your Estate Plan

As you consider your estate plan, don’t forget to review how your real estate, bank accounts, brokerage accounts, and even vehicles are titled. Account ownership plays a direct role in who receives your assets and how quickly they receive them.

Work with an experienced estate planning attorney who understands the laws in Missouri and Kansas. They can help you coordinate your ownership designations with your estate documents to avoid unintended outcomes. Proper planning today ensures your assets are passed on smoothly and according to your wishes—giving you and your loved ones peace of mind.