Avoiding Probate With Joint Tenancy

Property that is owned in joint tenancy can be a trap because the term itself has nice connotations. In joint tenancy, each person owns the entire asset, not a part of the asset. Joint tenancy is a pitfall because you cannot control where such property passes after your death. Neither spouse can disinherit the other spouse by leaving the property to someone else in their will. In general, courts prefer very specific wording that shows the desire to create a joint tenancy and the right of survivorship and not a tenancy in common. A co-tenant can also mortgage a share in the property.

A joint tenancy is not a comprehensive method of transfer and applies only to the specific property described in the instrument creating the joint tenancy. For transfers of personal property, such as stock certificates, the simple letters “JTWRS” may be used to designate a joint tenancy with right of survivorship. If you live in a community property state, you can elect that ownership option. At the time a new Joint Tenant — who is not the spouse of the original Joint Tenant — is added to the title of real property, the government considers a gift to have been made. But frequently, Joint Tenancy is used as a method of ownership between non-spouses. Unfortunately, Nick and Sandy had placed ownership of the painting in both their names, as Joint Tenants, rather than owning it as community property.

The deceased person’s interest was automatically transferred to the other joint tenant. Once a co-tenant’s interest in a tenancy in common is transferred, the new owner steps into the shoes of the co-tenant seller and becomes a tenant in common with the other co-tenants. What a co-tenant cannot do is transfer or sell the other co-tenants’ interests in the property.

• The signatures of all joint tenants are generally required in order to transfer or sell bonds and corporate stocks.
• “Right of survivorship” means that whoever dies last owns the property.
• An owner could even transfer his ownership interest in the property to someone else without permission of the co-owners.
• It the wife dies before the husband, the third party will own the property outright, or will have an enforceable mortgage on the husband’s full fee interest.

If Property is a Joint Tenancy, New York Laws Can Allow Probate Avoidance

As a New York City joint tenancy attorney, I have many years of experience working closely with my clients on property ownership issues. An advantage to joint tenancy may be easy access to the entire property by both parties along with quick and simple transfer upon the death of one joint owner. Each type of ownership has different requirements and consequences, as a New York City joint tenancy lawyer can explain. We practice in Minnesota in the areas of real estate, estate planning, probate, and business law. Because tenants in common can have uneven ownership percentages, each has the right to convey their portion and transfer title. Joint tenants are said to have a “right of survivorship” because they acquire ownership interest automatically after the other joint tenant passes away.

When you own property with a Joint Tenant, each of you owns half of the asset. But a tax audit of Rebecca’s return a few years later uncovered these omissions. Of course, there are some exemptions available for gifts. That’s why many Americans are shocked to discover that the step they’ve taken to avoid Wills and probate will in the long run cost them many, many times more money than it saves. Parents make their children Joint Tenants with them on everything from cash accounts to cars to the family home. An aging relative will often make a younger relative a Joint Tenant on property or cash accounts.

If, 20 years later, you sell it for $400, IRS rules let you subtract your $100 basis, leaving $300 in taxable profit. Usually, basis is what you paid for the property, with some adjustments. To understand the problem, you need to know a little about IRS “tax basis” rules. In some instances, maybe that’s what the deceased person really intended—it’s too late to ask.

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In situations where both spouses die together, there will be at least one probate and perhaps two. In spite of the concerns already discussed, some advisors continue to recommend joint tenancy! The joint tenancy offers no opportunity for instructions of any kind. It works exactly like joint tenancy with the right of survivorship, except that it is more restrictive.

Tenants in Common vs Joint Tenants

If a different form of ownership is desired between a husband and wife, then it must be specified as either tenants in common or joint tenancy with right of survivorship. And if two or more people inherit property from a last surviving joint tenant, they do so as tenants in common instead of as joint tenants. Joint tenancy is sometimes called “joint tenancy with right of survivorship.” Joint tenancy ownership implied that a joint tenant lost all interest in their property when they died. When you own as joint tenants, all the owners have equal rights to the whole property. Good estate planning and careful consideration of how the deed to a real estate purchase should read can save a lot of pain later down the line when one of the owners wants to sell the property or an owner passes away. How ownership interest in property passes can be important for two reasons, first, to avoid any issues after death of ownership interest in a piece of property among heirs and second, to avoid having an estate go through probate.

We provide experienced legal representation related to real estate matters in Newton, Waltham, Quincy, and other cities in Massachusetts. As a result, a house may pass to a surviving spouse’s new spouse rather than your children, if you die first. You cannot leave your interest in the real estate to someone in a will as you can with a tenancy in common. As long as there is at least one joint tenant who has survived, there will be no probate. For example, if a property has four owners, each gets a one-fourth interest. However, no matter how the property is held, it may be necessary for a survivor to get a release of the estate taxes, which can become a lien on the property.

Probate Is at Best Delayed, Not Totally Avoided

Joint tenancy is unquestionably the most popular probate-avoidance device around.

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Instead, remarried parents when do you need joint tenancy should choose ownership strategies that will help them ensure their children are well provided for in the event of their death. Estate planning considerations are also affected by property ownership. Unlike with a joint tenancy, the tenants in common do not have a right of survivorship in the shares owned by the deceased. The other option when multiple owners are purchasing a property is for all of the owners to be tenants in common.

Tenants in Common

• Under tenancy in common, when a tenant in common passes away the shares that belong to the dead owner pass to heirs under the laws of Minnesota inheritance.
• He outlived Raine, and inherited all of her assets, which his own children ultimately inherited from him.
• If the sum of all of the survivor’s property is less than the amount that can be passed free of estate tax, this may not be a problem.

Joint Tenancy does alleviate the need for probate when the first owner dies. For the vast majority of American couples, “till death do us part” also means, “till death do we hold property in Joint Tenancy.” Jules Haas helped me with managing the process in probate court for my father’s estate through to its completion upon the sale of my father’s house. Tenancy in common joint tenancy issues are important to understand and resolve.

The Pitfalls of Joint Property Ownership in North Carolina

So, yes, it does circumvent probate and avoid the need for a Will. Ironically, otherwise well-informed consumers choose Joint Tenancy because they’ve heard it is a cost-free replacement for a Will and that it avoids probate. I just completed an estate transaction where Jules Haas represented my client in an estate and he did a great job!

The Symingtons had no children, but Jerry had a niece and nephew who were dear to him. And often, remarriage means that either one or both of the partners has children from a previous marriage. When they added in the value of their autos, furnishings, and cash accounts — all held in Joint Tenancy — they were slightly amazed to discover their estate was worth $1.5 million. Frequently called the “Poor Man’s Will,” Joint Tenancy is often used as a replacement for Wills and as a tactic for avoiding probate. What all too many Americans unfortunately overlook is the fact that Joint Tenancy only temporarily avoids probate.

That property would pass automatically to Susie without any need for probate to happen first. Tenancy by the entirety has similar properties to joint tenancy with rights of survivorship but is only available to people who are married. However, most married couples will own property as tenants by the entirety. If the conveyance specifies that the grantee is taking jointly, this is construed as applying to all grantees, regardless of their marital status, unless there is a contrary intent expressed or implied by the transfer instrument.

Can you challenge the right of survivorship?

Joint tenancy makes estate tax planning extremely difficult and may rob clients of the ability to reduce the estate tax burden imposed on their loved ones. The moment this is done, the transfer of property is often considered by the IRS to be a gift, and if the value is above $13,000 (in 2011), it will have to be reported to the IRS. Frequently, an older parent designates a son or daughter as a joint tenant on bank accounts and/or other property. With married couples, joint tenancy does not avoid probate—it only delays it. What if your spouse or children need assistance in managing the property you left them?