Joint Tenancy remains a popular form of property ownership as people tend to elect this form of ownership to avoid probate. Many of my clients stated that when they bought a house, they chose to create a joint tenancy without really going any further as to what that entails. Joint tenancy with right of survivorship means that each person owns the entire asset (undivided equal share), not just part of it. When one owner passes away, the person's share immediately passes to the other owners in equal shares, without going through probate. We’ve all been told that joint tenancy can be a simple and inexpensive way to avoid probate, and this is sometimes true.
But careful consideration should be made for the potential tax consequences and other problems of joint tenancy ownership. Here are some of the disadvantages of joint tenancy which far outweigh the advantages:
Joint Tenancy does have its advantages, such as:
Before placing your property in a certain type of ownership, I highly recommend becoming familiar with all types of property ownership and taking into consideration your objectives and consequences to your heirs.
About the Author
Christine Chung, Esq.