Q: Years ago a Greeley attorney told me and others that if we had the childrenŐs names on things and also designate them to take at death, a Will or a Durable Power of Attorney is not needed. Why donŐt you tell people about that?

A: I disagree very strongly with the Greeley attorneyŐs advice. It is true that if there are no problems, the joint ownership and payable on death designations work just fine. But if life does not go as planned, the Will has the flexibility to adjust to meet your objectives.

LetŐs review only a few things that might upset the apple cart. If a child unexpectedly predeceases, then his or her descendants are excluded from receiving an inheritance, unless ownership of everything is taken out of joint tenancy. Also, with beneficiary designations, a company may not pass down the share of a deceased child to his or her descendants if the beneficiaries were specially named. Everything could only go to the listed beneficiaries who are living.

Unlike a beneficiary designation that usually can be changed, once a name goes on title, that share of the asset belongs to that person. Thus if there is a divorce or a bankruptcy or financial difficulties, then the receiverŐs share could be lost because it is his or her property now. Even worse, if the asset such as real estate cannot be divided, the property could be ordered sold (perhaps at less than fair market value) and the net proceeds split.

Whether it is real estate, investments, personal property, etc., once a name goes on title, that person is an owner. Thus if that person wants to take his or her share, require that rent be paid, sell, etc., Mom or Dad might be forced to do things that would not be in his or her best interest.

If Mom or Dad wants or needs the property back, and if one of the title holders refuses to cooperate, then there may be little that can be done to force the return of the asset.

If the asset, such as real estate, stocks, collectibles, etc., has increased in value, then the other "owners" will only get a stepped up basis on Mom or DadŐs retain share in calculating capital gains but not what was given. Remember that a benefit of having death taxes is that the inheritors receive a fresh start by having their tax basis increased to the value at date of death.

Also remember that putting someone else (except for a spouse) on title is a gift. Only a total of $12,000 of value per person per year can be given without gift taxes having to be paid, unless appropriate tax returns are filed reducing the $1,000,000 gift tax exemption of the giver.

There are so many problems but so little space. Yet at least one more concern should be listed. The receiverŐs share could end up in the hands of a stranger, or an in-law, or grandchildren. Your child might honor the informal understanding to handle things for your benefit, but others might not.

A final word about Durable Powers of Attorney. Just because someone else is on title does not give that person the right to represent all the other title holders, even if that someone is a spouse. Thus joint ownership is not a substitution for a Durable Powers of Attorney.

Yes, adding the children to everything and naming them as beneficiaries might work fine, but then again, it could have disastrous consequences.