The Benefits and Limitations of Owning Property in Joint Tenancy
Joint tenancy with right of survivorship is a popular property ownership method that allows for probate avoidance. Any property owned in this format automatically passes to the surviving owner or owners of the property without having to go through the probate process.
Here are just a few of the primary advantages of owning property in joint tenancy:
- It’s easy to set up a joint tenancy.
- Joint tenancy can be used for bank accounts, real estate and more.
- The survivor frequently will be protected against potential claims by creditors after the death of a co-owner.
- There can be more than just two joint tenants.
There are, of course, a few drawbacks and limitations associated with owning property in joint tenancy. Those include:
- The final joint tenant must use another method to transfer the property upon their death in a way that avoids probate, such as a trust.
- All shares of the property held in joint tenancy must be equal for all owners, so there’s not a lot of flexibility for ownership structures.
- You will not avoid probate if all owners of the property die simultaneously. While this isn’t particularly common, it can happen for couples who get into an accident, for example.
- For people who own property by themselves, adding a joint tenant results in them having to give up half their share in the property. Every time a joint tenant is added, more of that property share has to be given up.
For more information about owning property in joint tenancy and some of the reasons to consider it as a method of probate avoidance, contact an experienced lawyer at BaumannKangas Estate Law.