Out of love and financial expediency, the vast majority of couples own their assets jointly. Most commonly this takes the form of "with rights of survivorship." Under such rights, each owner has an undivided interest in the property and can't sell it without the consent of the other owner(s).

Couples usually take this route because (a) it seems the natural and "loving" thing to do, (b) financial institutions such as banks tend to push it, and (c) it avoids the expense and delay of probate when one of the spouses dies. However, warn financial planners, holding all marital property in joint tenancy is not always a great idea, for several reasons:

Estate taxes. When one spouse dies, the surviving spouse receives all jointly owned property without going through probate and without gift or estate taxes through the unlimited marital deduction (the exception is noncitizen spouses). That's what makes joint tenancy so appealing. Unfortunately, in the case of larger estates that can be a tax disaster. Each spouse is entitled to a $600,000 exemption from estate and gift taxes. But if one spouse passes his or her estate to the other via joint titling, that exemption is wasted. When the surviving spouse dies; $600,000 can be passed on tax free to the children or other heirs, but anything above that is taxed, starting at 37 percent.

Remarriage. Jointly titled property in a second marriage means the property goes to the surviving spouse, and, perhaps ultimately, to the children of the surviving spouse's first marriage. That leaves out of the loop any children from the first marriage of the spouse to die first.

Liability. Jointly owned property is open to creditors of either spouse. That means income and assets contributed by one spouse to their joint accounts could be confiscated in the event of a liability judgment or business debts owned by the other spouse. Some experts say couples shouldn't even own cars jointly. Holding property in the other spouse's name isn't foolproof protection against claims, but it's far better than joint ownership.

Self-protection. Should one spouse become incapacitated, the other spouse cannot sell, borrow against, or gift jointly owned property without permission from the courts (unless the couple had enough foresight to have prepared powers of attorney in advance).

Also all too common is that one spouse handles all the family's finances and the other spouse doesn't know what to do when that spouse dies. Owning at least some property separately compels both spouses to take some responsibility for money.

Careful titling and the use of trusts and other estate planning techniques can solve or mitigate many of these problems. For example, if you and your spouse each have $600,000 in your own names, then the first to die can pass his or her estate assets to other heirs free of tax. The surviving spouse can do the same thing. Effectively, this means passing on $1.2 million tax free.

Similarly, a by-pass trust (sometimes called a credit-shelter trust) can be used to the same end. The assets from the estate of the first spouse to die go into the trust. The surviving spouse receives income from the trust, but the principal remains outside the estate of the surviving spouse and goes to the heirs at death. Except in community property states, however, a by-pass trust cannot be funded with jointly owned property. If that's the case, with a properly drawn will, the surviving spouse can disclaim jointly owned property and it will be put into the by-pass trust.

A qualified terminable interest property trust (QUIP) is useful for seeing that jointly owned property goes to children from a first marriage. The surviving spouse receives all income from the trust, and can get at some of the principal. But at death, the remaining trust assets will go to the designated children.

One fear couples have for divvying up property for individual ownership is in the event of a divorce. The partner who's earned the money may be reluctant to put some of it entirely into the spouse's name, even as a way to protect against lawsuits. Financial experts say the fear is largely unfounded, since the courts generally care less about how property is owned than in determining an equitable distribution of the property (it's divided 50-50 anyway in community property states). However, laws vary from state to state in what constitutes equitable distribution.

Also be aware that joint tenancy usually supersedes any prenuptial agreements regarding jointly owned property.

July -30-1997