Joint Tenancy

Joint tenancy with rights of survivorship is a commonly utilized estate planning method. Here's a look at the basics of taking title in the form of joint tenancy.

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There are several different ways to hold title to property. The one you choose will have an impact on the rights you have to property, what happens to it when you pass away, and sometimes what you pay in taxes. If you’re buying property with someone else – a spouse/partner or child – joint tenancy might be the best option to avoid having your property tied up in probate after you pass away.

Joint tenancy is a type of property ownership that allows more than one person to own the same property at a time. Often known as joint tenancy with right of survivorship (JTROS), a surviving owner automatically gains property ownership when the other property owner passes away.

Co-owners in a joint tenancy must have equal shares of the property. So, if there are two co-owners, they each own 50% of the property. If there are proceeds from the property, like rent, the co-owners should receive an equal share.

It’s important that joint tenancy is specifically stated in the title to avoid confusion with tenancy in common. Using the long wording, “joint tenancy with rights of survivorship,” is most effective.

Estate Planning and Survivorship Rights

The right of survivorship included with joint tenancy eliminates the need for a will to specify what happens to the property in the event of a co-owner’s death. Many times, property owners pass away without having a will. Joint tenancy helps avoid issues with post-death property ownership by specifying that the co-owner automatically receives full interest in the property.

Even if there is a will stipulating the property be passed to an heir, the right to survivorship supersedes what’s stated in the will. The property does not pass to the deceased owner’s heirs and it does not go through the probate process.

During estate planning, co-owners must be careful about making plans about the property’s inheritance. If the will contains a clause to break or end a joint tenancy and give the property to another heir, it will not be legal. Joint tenancy does not, however, eliminate the need for a will, since there are typically other property and interests to consider.

Creating a Joint Tenancy

Certain conditions, called unities, must be satisfied for a joint tenancy to be created. These are commonly known as the “four unities” and they must be shared by the property owners.

  • Unity of interest, both parties must have the same rights to the property. For example, one party cannot have fee simple estate rights while the other has split estate rights.
  • Unity of possession, both parties must be allowed possession of the entire property. Neither co-owner is able to exclude the other.
  • Unity of time, each owner must receive the title at the same time.
  • Unity of title, each party receives title on the same document. That document could be a deed or another document that serves as evidence of title.

Joint Tenancy for Married Property Owners

Tenancy by the entirety is a special type of joint tenancy for married couples that also has the right of survivorship. However, neither party can break the tenancy by selling his share of the property. Instead, the tenancy by the entirety is broken through a divorce. In that situation, it becomes a tenancy in common and there is no longer a right to survivorship.

Breaking a Joint Tenancy

Breaking a joint tenancy can be done rather easily. One co-owner simply has to take an action that doesn’t follow the rules of a joint tenancy. For example, if one co-owner sells his share of the property, then the unity of time rule is no longer shared. The joint tenancy is broken and a tenancy in common is created.

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