"When my husband died, my kids wanted me to put them on the house. I haven't done it yet – should I? My daughter lives locally, and she's on my accounts so that if something happens to me, she can take over."

Mrs. Selby was visiting her attorney to discuss updating her will after the death of her husband of over forty years. She was testing "conventional wisdom" against professional advice. Her four children had suggested ways to simplify management of her money during her life and transfers at death by using joint ownership.

"But I've heard stories," she continued, "about problems when children are joint owners. It seems like I might be in for problems. Is that true?"

Her attorney nodded. "Joint ownership is like the little girl with the little curl – when it's good, it's very, very good, but when it's bad, it's horrid.

"The problem comes from the fact that when you make your child a joint owner on your bank account or your house, you are actually making them an owner right now, not just when you die. So their creditors or divorcing spouse can try to take your assets.

"It can even get worse. I've had cases where the child who is joint on the accounts doesn't give the others a fair share. I'm sure your daughter would never do that, but 'you don't know your family until you've shared an inheritance with them.' Money brings out the worst in people."

"That's what I'd heard," Mrs. Selby replied, "and I know I don't want any of that. But at my age, I think I need somebody to be able to take over if something happens to me."

"There's nothing wrong with that," her attorney assured her, "but you have to do it the right way.

"There are three ways somebody can be 'on your accounts' at the bank. The first is joint ownership. This is a combination of the other two – control during life and ownership at death – with the addition of ownership during life. Most people want the first two, but not the third.

"The second is to name someone as your agent under power of attorney or 'POA.' That means they can use your money for you while you're alive. They can't take your money for themselves, and their creditors can't get at your money, either.

"Your agent under your POA doesn't automatically get your money when you die, so we don't have to worry about her being tempted to do the wrong thing.

"The third is called 'paid on death' or 'POD.' A POD beneficiary is the person who gets whatever is left in your account when you die. They don't have any control over your account during your life; all they have is the right to get whatever you haven't spent. So their creditors can't make your life miserable.

"So by using a POA and POD in combination, you can get the best of both worlds, without the risks of joint ownership."

"That makes sense," Mrs. Selby nodded. "How about the house?"

"The problem with joint ownership is even worse with a house. If you put your kids on the deed, you can't sell unless they agree, and when you die, their taxes will be higher when the house is sold. Neither of those seem very attractive to most of my clients."

Mrs. Selby shook her head, concurring that these weren't acceptable to her, either.

"You have lots of options," advised her attorney. "Here's one I often use.

"Most of my clients want to keep control of their house during life, but they want the kids to get the house quickly and simply at their death. Are those your goals?"

"Yes. My husband and I worked hard to pay off the mortgage and keep the house up. I mean, it's my house now that my husband is gone, and the children don't get it until I'm gone."

Her attorney nodded agreement. "That's what most of my clients feel. I suggest that we change the deed to the house so that you keep a 'life estate' – you can live in the house as long as you want and it's safe, you can sell it, mortgage or reverse-mortgage it, lease it, give it away, whatever. But when you die, the house passes immediately to the kids, with no court filings, paperwork or delays. Then they can decide whether to sell it, one can buy the others out, whatever works for them at the time.

"This gives you the best of both worlds, without the headaches of joint ownership. What do you think?"

Mrs. Selby nodded. "I like both ideas. Let's go with the new deed, and I'll talk to the bank."