Joint tenancy with right of survivorship is a legal relationship established between at least two co-owners of some kind of asset. Under joint ownership, each partner owns an equal portion of the asset in question. Right of survivorship is a clause that states that upon the death of any partner, their interests will pass to the surviving members of the tenancy.
Joint tenancy with right of survivorship is a type of co-tenancy, a legal concept that refers to the ownership of property by multiple people simultaneously. Joint tenancy with right of survivorship is distinct from other forms of co-tenancy because it gives the co-tenants equal rights to the assets and grants the right of survivorship to the partners.
Joint tenancy allows a number of advantages to the partners in question. Unlike most post-mortem transfers of assets, assets held in joint tenancy with right of survivorship can be freely transferred to the surviving spouse, business partner, or friend without the interference or authorization of a probate court. This can allow seamless transfer of title to bank accounts, stock brokerage accounts, real estate holdings, or personal possessions.
When purchasing property with another individual, the first thing that must be established is how that property will be owned between the parties. Depending on the closeness of the partners, joint tenancy with right of ownership may be explored as an option.
Joint tenancy can be a more restrictive process than other forms of co-ownership like “tenants in common.” A joint tenancy of any kind requires that all parties control an equal portion of the asset in question. By contrast, tenants in common can own unequal shares of an asset, allowing for more nuanced ownership of a property.
For example, if two people purchase a home under joint tenancy and both parties agree to the right of survivorship, then the house is 50% co-owned by both parties with complete ownership falling to the survivor if one of them dies. Most often this will occur with married couples. If, however, the marriage deteriorates and the couple splits up, then there will need to be negotiation over who should own the house and who should give up their ownership share.
Similarly, if five business partners found a company under joint tenancy with right of survivorship and one partner wants to pass on their 20% share to an heir, the right of survivorship may prevent that transfer of ownership due to the preexisting condition that the partner’s 20% ownership stake pass to the remaining partners.
For some individuals, joint tenancy with right of survivorship may not be the best choice for acquiring assets with other individuals. This is particularly true for individuals hoping to leave that property to an heir. Under joint tenancy with right of survivorship, the only ways to leave property to an heir is if either all partners agree to pass their shares to an heir upon the death of the partner in question, or if the individual passing on the asset is the last partner alive.
Joint tenancy with right of survivorship is a multifaceted legal tool. If you want to know if it is best for your financial future and your heirs futures, you will need a trusts & estates attorney.
An experienced trusts & estates attorney can consult with you on the exact purpose of the jointly-owned asset as well as your future intentions with it. Then, your trusts & estates attorney will explore all possible legal avenues to return you the best possible outcome for preserving your interests and the property interests of your heirs.