San Antonio Express-News
September 16, 2003

Wording Can Be Tricky

copyright 2003, Paul Premack

First let’s get the language straight. You say everything is held "in joint tenant" holdings. In Texas, those words mean that there is not a survivorship right. In other states, those words mean that there is a survivorship right. That is important, since your goal can be met with one, and will fail with the other.

Specifically, if an account does have a survivorship right and you do precede your wife in death, then she legally becomes the owner of the account. As owner, she can spend the money, save the money, give away the money, and leave the money to whoever she desires in her Will.

Since you want "your half" of the money to go to charity, and not to go where she might select, you must take action to control the disposition of those assets. Contact each financial institution where you have funds. Instruct them that you do not want any survivorship rights on your accounts.

They may not allow you to change the accounts without your wife’s participation, so you might be forced to withdraw your funds and re-deposit them into new accounts that are properly established. Your wife has the legal right to be a joint owner of the new accounts, so she will have to sign the new account agreements. There’s the catch: if she won’t accept removal of the survivorship right at bank #1, she’s not likely to sign new account cards at bank #2. Your best bet is to enlist her cooperation with a full explanation of your goals.

I notice that your other goal is to protect your wife, so she will have the economic benefit of your half after you die. But if you give it to her no-strings-attached, she may legally give it to your children. The cure is to 1) remove the survivorship rights, 2) re-write your estate plan to include a trust for your wife’s benefit, and 3) leave your half to the Trustee of that trust.

Once you pass away, your funds will be held in trust for your wife’s benefit. The Trustee you select can use the income produced by the assets to support your wife. You can even allow the Trustee to spend some of the principal (of your half) for other needs your wife may have. However, since your wife never becomes owner of the assets, she cannot dictate to whom they pass when she dies. Instead, the trust that you created would require that the funds be paid to your favored charities after your wife dies.

Trusts can be created as part of a Will, or as stand-alone ("living") trusts. If inside your Will, the trust begins to do its job at the time your Will is probated. If stand-alone, then the trust begins to do its job right after you create it. If handled correctly, the living trust can avoid going through probate court. Talk to a certified elder law attorney about your legal options. Both your goals – caring for your wife and the charity -- might still be achieved.