Jul
23
Joint Accounts and IRAs for Non-Married Persons
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What is Joint Tenants with Rights of Survivorship (JTWROS) and how can it help us in our joint ownership?
JWTROS is a specific type of joint ownership that ensures the surviving partner will be named sole owner of remaining funds upon the death of the first partner. Due to several complex taxation rules, it's important that joint owners using the JWTROS designation keep detailed records.  Otherwise, the IRS may attempt to tax jointly held property in both the estate of the deceased spouse and at the death of the surviving spouse. Keep in mind that joint bank accounts are afforded only a presumption of joint ownership; they remain subject to challenge in court. What are some alternative strategies for joint ownership? Some of the other strategies available to same-sex couples include a Revocable Living Trust, Durable Power of Attorney, or testamentary substitutes such as Transfer-on-Death accounts. Please contact us at info@besunderlaw.com for further information. If my partner passes away, do I automatically receive a tax-free rollover of his IRA account into my own? No. While a surviving spouse is entitled to take an IRA into a spousal IRA rollover, a non-spouse beneficiary has limited recourse. Some employers allow in their plan for a Pension rollover to a domestic partner; however, these provisions were primarily intended to protect same-sex couples before the United States Supreme Court decision in Windsor in June 2013, and those protections are not likely to continue in the future for the protection of couples who choose not to marry although they are able to do so. Keep in mind that for everyone -- heterosexual or same-sex couples, married or unmarried -- all IRA distributions remain income taxable regardless of status. Please consult an estate planning attorney on this and other issues.

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