Handbook
• JOINT TENANCY WITH RIGHT OF SURVIVORSHIP
Co-owners can hold title to property as Joint Tenants. This means that when one
Joint Tenant passes away, his share is automatically distributed to the surviving
Joint Tenant(s). Thus, this property will be distributed outside the Will.
A common example is a married couple that owns their home as Joint Tenants. If
one spouse passes away, the surviving spouse automatically inherits that share.
This form of property ownership does not just apply to real property. For example,
Bank Accounts are also often owned by individuals as Joint Tenants. In addition,
you don’t have to be a married couple in order to use this form of ownership.
Note: A married couple can also own real estate as Tenants by the Entirety which
can also avoid probate. A form of ownership called Tenants in Common does not
avoid probate.
Note: In terms of avoiding probate, there is a potential problem with this type of
ownership. As we’ve said, when the first spouse passes away, the surviving
spouse automatically inherits this property. However, when the surviving spouse
eventually passes away, there are no other Joint Tenants surviving that will inherit
with the “right of survivorship”. In addition, if both spouses pass away
simultaneously (e.g., car accident), again there are no other Joint Tenants
surviving that will be inheriting with the “right of survivorship”.
In addition, if you give someone Joint Tenancy of property you own, you can’t just
change your mind or take it back later. Once they are a Joint Tenant, they legally
own an equal share of it. In a home, giving Joint Tenancy would also involve cost,
paperwork and considerations such as your contractual obligations to your
mortgage company.
In these situations, transferring the property ahead of time to a Revocable Living
Trust instead, where other beneficiaries are designated, may be the best answer.
The property would then be distributed to these beneficiaries outside of probate.
And, because a Revocable Living Trust is revocable, you can revoke or change it
at any time before you pass away.
