Streamline Your Estate Planning with Simple Account Titling Strategies

Learn why choosing the right titling strategy—such as joint tenancy or TOD accounts—can simplify estate planning and help your assets avoid probate.

When it comes to estate planning, how your accounts are titled can have a significant impact on what happens to your assets after you pass away. Certain titling strategies can help you avoid probate, simplify asset distribution, and ensure your wishes are carried out. Others—if not handled properly—can lead to unintended consequences.

In this article, we’ll walk through three common account titling strategies and how each one works:

Joint Tenants with Rights of Survivorship (JTWROS)

Tenancy in Common

Transfer on Death (TOD) or Designated Beneficiary Accounts

Keep reading to learn more.

1. Joint Tenants with Rights of Survivorship (JTWROS)

This is one of the most widely used account titling strategies—especially for married couples. When two people hold an account as joint tenants with rights of survivorship, ownership automatically passes to the surviving account holder when one person dies. It bypasses probate, meaning that asset won’t be subject to the court-supervised process of estate settlement.

However, there are some important cautions:

Second marriages beware: If you have children from a prior marriage and intend for your assets to go to them, jointly titling accounts with a new spouse could override your will. The surviving spouse receives full ownership automatically, regardless of your other estate documents.

Adding a child to an account: It’s common for older individuals to add a child to a checking account to help with financial affairs. But by doing so, the entire balance of that account may go to that child upon your passing—not through your will. The result? Your estate may not be divided as intended, and the child may face tax implications if they try to redistribute the funds to siblings.

Gifting implications: Joint accounts shared with a child could trigger unintended taxable gifts if the parent contributes funds and the child withdraws them.

A better alternative in some cases is to open an individual account for the child and add yourself as a financial power of attorney, rather than a joint owner.

2. Tenancy in Common

Tenancy in common allows two or more individuals to hold shared ownership of an account or property, but with a key difference: each person owns a specified percentage of the asset, which can be passed to their heirs through their will.

For example, if a couple owns a home or account as tenants in common:

One person could own 50%, 70%, or another share.

Upon their passing, their share would go to their designated heir(s) as specified in their will—not automatically to the surviving account holder.

This structure can be especially helpful in second marriages or blended families, where each person has different intentions for their share of assets. It allows for more control and flexibility in distributing wealth after death.

3. Transfer on Death (TOD) or Designated Beneficiary Accounts

The third strategy is to title an account as transfer on death (TOD) or to designate beneficiaries directly, which many custodians allow. These designations allow your assets to pass directly to named beneficiaries upon your death, bypassing probate entirely.

All your beneficiary needs to do is provide the custodian with a copy of your death certificate to initiate the transfer. This makes it a simple and efficient way to pass along assets.

But this convenience comes with responsibilities:

Your will does not apply: Assets with designated beneficiaries will go directly to those individuals, regardless of what your will says. If you name only one child as a beneficiary on a TOD account intending for them to divide the money among siblings, the legal obligation to do so doesn’t exist.

Regular updates are critical: Life circumstances change. A marriage, divorce, or birth of a child may require changes to your beneficiary designations. Keeping these records up to date ensures your assets go where you want them to.

Don’t forget that retirement accounts like 401(k)s and IRAs often include beneficiary designations, which should also be reviewed regularly as part of your broader estate plan.

Final Thoughts on Choosing the Right Titling Strategy

Account titling can work in tandem with—or against—your estate plan, depending on how it’s handled. A strategy that avoids probate can be useful, but it also bypasses your will. That’s why coordination is key.

Whether you’re planning to support loved ones, protect assets, or simplify administration, make sure your account titling reflects your intentions. If it’s been a few years since you’ve reviewed your account structures or beneficiaries, now’s a great time to take another look.

How Paces Ferry Wealth Advisors Can Help

If you’re unsure whether your accounts are titled appropriately—or whether your assets will be distributed according to your wishes—Paces Ferry Wealth Advisors can help. Contact us today to review your estate planning strategies and coordinate your accounts with your long-term goals.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.