tenants by the entirety

[braindoc]

Two questions regarding tenants by the entirety.

1. Is opening a joint brokerage account the same thing as opening it as tenants by the entirety (assuming you live in a state that allows this)?

2. How/when do you title your home as tenants by the entirety?

[CM]

The brokerages will allow you to title the account in different ways. Tell them you want the form to open an account as tenants by the entirety.

From experience I can tell you that some of the people who answer the phone may not understand the difference between tenants by entirety and other forms of joint ownership; you may have to explain it to them in order to obtain the correct form.

I purchased our house under my name then went down to the government offices to change the title to tenants by entirety after I married. If you are buying a house as a married couple just make sure to have it titled properly from the get-go.

[Tim]

https://www.thebalance.com/tenants-by-entirety-versus-joint-tenants-3974805

State specific where allowed. On your brokerage account it will have type of ownership indicated
Name (TBE) vs (WROS) vs (TIC).

Your county keeps the deed records if you need to make a change.

[deeppizza]

I've recently changed all my brokerage accounts to tenants by the entirety. By far the easiest was Fidelity, which just basically had me right a letter of instruction to them to change the title. Schwab was a little more involved by filling out a specific form and submitting it along with another form that deletes the beneficiaries we previously had on our account (Schwab does not allow beneficiaries or TOD with joint accounts titled as tenants by the entirety). But within a week, it was changed. Vanguard is the most painful - you have to open a new brokerage account, and have it specifically titled tenants by the entirety. The problem is that this specific title isn't listed as an option when you open a new account online. I ended up calling them (waited about 45 min on hold) before someone was able to help. They began the application online, and then basically save it to your profile. You then fill out the rest and submit it online. After the new account is made, you have to mail in another form to transfer all the assets from your previous joint account to the new one. One caveat is that you will lose all cost basis data with the rollover, so keep good records. Obviously the easiest is just to open all your joint accounts as tenants by entirety from the start (if your state allows), but remember that some brokerages prevent you with having beneficiaries on such accounts (Vanguard and Schwab).

[CM]

I've recently changed all my brokerage accounts to tenants by the entirety. By far the easiest was Fidelity, which just basically had me right a letter of instruction to them to change the title. Schwab was a little more involved by filling out a specific form and submitting it along with another form that deletes the beneficiaries we previously had on our account (Schwab does not allow beneficiaries or TOD with joint accounts titled as tenants by the entirety). But within a week, it was changed. Vanguard is the most painful - you have to open a new brokerage account, and have it specifically titled tenants by the entirety. The problem is that this specific title isn't listed as an option when you open a new account online. I ended up calling them (waited about 45 min on hold) before someone was able to help. They began the application online, and then basically save it to your profile. You then fill out the rest and submit it online. After the new account is made, you have to mail in another form to transfer all the assets from your previous joint account to the new one. One caveat is that you will lose all cost basis data with the rollover, so keep good records. Obviously the easiest is just to open all your joint accounts as tenants by entirety from the start (if your state allows), but remember that some brokerages prevent you with having beneficiaries on such accounts (Vanguard and Schwab).

Your Schwab experience was better than mine. I made multiple calls and could not manage to get my account ownership converted. Ultimately, I had to open a new account as TBE, then transfer my assets out of the old account into the new one.

I wrote about it here, and I believe the pulm doc who is a financial advisor wrote that the asset protection may not work in some circumstances if the ownership type was a conversion rather than a new account opened as TBE. I don't know if that is true or not, but I decided to open a new account at Fidelity as well, and transfer assets out of the old accounts there as well.

[braindoc]

Thanks everyone!

[endo4jc]

Your Schwab experience was better than mine. I made multiple calls and could not manage to get my account ownership converted. Ultimately, I had to open a new account as TBE, then transfer my assets out of the old account into the new one.

I wrote about it here, and I believe the pulm doc who is a financial advisor wrote that the asset protection may not work in some circumstances if the ownership type was a conversion rather than a new account opened as TBE. I don't know if that is true or not, but I decided to open a new account at Fidelity as well, and transfer assets out of the old accounts there as well.

Within the last week I opened a brokerage account at Fidelity. The only options listed online were “Joint With Rights Of Survivorship” and “Joint Tenants In Common”. What kind of account did open at Fidelity?

At Vanguard, I opened a Tenants By The Entirety brokerage account.

[CM]

Within the last week I opened a brokerage account at Fidelity. The only options listed online were “Joint With Rights Of Survivorship” and “Joint Tenants In Common”. What kind of account did open at Fidelity?

At Vanguard, I opened a Tenants By The Entirety brokerage account.

I can't remember the details at this point, but I talked with the reps at Fidelity, made sure they understood TBE, and then followed their directions to open the account.

[PacificRunner]

I've recently changed all my brokerage accounts to tenants by the entirety.

I did the same thing last year. However, I have read (and I am too lazy to go find and share the sources) that to truly be TBE, a "unity of time" component must be satisfied. Meaning you must jointly take ownership of an asset at the same time. Some people question in the internet ether question whether retroactively adding a spouse to your taxable account would qualify. I still did it, but I'm not super confident in it. Plus anyone can challenge anything in court.

[Auric goldfinger]

I went through my entire career with all taxable in my wife’s name. Other than my IRA, she owned everything- even my medical building. Mostly a byproduct of the malpractice crisis that I started practicing in. Can’t sue you for what you don’t own. Hope she doesn’t want a divorce. Figured out trust divisions after retirement.

[goldenchimpy]

Recently did this at fidelity. They do not allow you to open JTE initially online. You open the joint account with one of the other methods such as rights of survivorship. Once it’s open you go to “accounts and trade”. Then “account features.” Then “authorized access and account registration”. From there you select the account and check off that you want JTE. Both you and the other co-owner e-sign a few forms and in 3 business days they open a new account that is titled as JTE.

It sounds a bit annoying but all together it took maybe 10 minutes.

[Larry Ragman]

I went through my entire career with all taxable in my wife’s name. Other than my IRA, she owned everything- even my medical building. Mostly a byproduct of the malpractice crisis that I started practicing in. Can’t sue you for what you don’t own. Hope she doesn’t want a divorce. Figured out trust divisions after retirement.

But TBE will do the same. Both of you own the entire investment, not half, so it cannot be attained in a law suit against one or the other. Use of TBE for investment accounts does complicate the use of beneficiary designations for estate planning, but that only matters if both owners die simultaneously.

[altadoc]

And you are much more likely to get divorced than you are to get sued for an above policy limits decision. I've never understood why people title things exclusively in their spouse name.

[jfoxcpacfp]

And you are much more likely to get divorced than you are to get sued for an above policy limits decision. I've never understood why people title things exclusively in their spouse name.

Clients’ E&T attorney (Alaska) recommended putting assets in the spouse’s (non-doctor) name. I don’t question attorneys in legal matters, but, since you’re an attorney, can you comment on this advice? We have collaborated on estate planning and I have until this point been confident in the quality of advice received.

[altadoc]

I'm very curious to hear that advice coming from an attorney. It may have something to do with Alaska being an (opt-in) community property state. I'd push the attorney and ask why they are advocating for that decision. It could be a way to protect those assets from creditors while also ensuring if there is a divorce, the property is split equally. That is not going to be the case in community property states. In community property, the name of the title is the owner of the property. Period.

Looking at the data on med mal, the likelihood of a plaintiff's settlement is low if a physician is sued. The chances of paying higher than med mal insurance limits are exceedingly rare. While rates of divorce are lower for physicians and professionals than the general public, a divorce is much more likely than an above policy limits lawsuit.

Let me know what you find out from the attorney.