Many people in Michigan may assume that probate is something to be avoided at all costs. By adding another person’s name to a property title or a bank account, they may be able to skip over that process. However, as Bankrate.com points out, there are dangers to sharing ownership of assets, particularly for people who are not spouses, even though the rights of survivorship can negate the need for a will or probate.
When both names are on an account, either person may withdraw or transfer funds, no matter who deposits the money. Other actions by one person that could affect both include money garnished by a debt collector or for child support, a lien and overdraft charges. If the person added to the account withdraws more than the annual limit, it may be subject to gift taxes, even though it is not intended that way.
Forbes magazine explains that while adding the second person to the account or title is a decision made by the owner, removing someone from a joint account or title requires the agreement of both of them. This makes a joint tenancy or account a solution that is only as strong as the relationship and its potential to remain secure.
If someone is determined to avoid probate, a revocable trust may be an option that eliminates the risks of sharing assets now. This allows the owner to continue to use the property or funds until death, but then transfers them to the trust. Then the person who has been named the administrator of the trust would distribute the assets as directed, without involving the court.