Joint tenancy is the condition of co-ownership of property. Joint tenancy with right of survivorship allows the surviving joint tenant to inherit the entirety of the property that was held in joint tenancy. The transfer takes place outside of probate.
This can seem like a viable estate planning solution. Let’s say that you want to leave your home to your son after you die. You could add your son to the deed of your home, making him a joint tenant. After you die, he would assume ownership of the entirety of the home, and this transfer would not be subject to the probate process.
Probate is often avoided because it is time-consuming, and it can be costly.
When it comes to probate avoidance, joint tenancy is a possibility. However, there are certain drawbacks that can potentially go along with it.
Drawbacks of Joint Tenancy
When you make someone a joint tenant, you are immediately making this person a co-owner of the property that is held in joint tenancy. If the joint tenant that you added to the deed or title of your property was to encounter financial difficulties, this property could be attached. The property could also be in play during divorce proceedings.
This is one of the drawbacks of joint tenancy. Even if your joint tenant is very responsible financially, it is possible that he or she could be the target of a lawsuit. Responsible people are sometimes sued due to circumstances that they really could not foresee.
Some people see joint tenancy as a simple but comprehensive solution, and this can backfire.
Let’s look at another possible scenario.
John wants his home sold after he dies, and he wants the proceeds spread among all of his children and grandchildren. He adds a single joint tenant to the deed of this property. He instructs the joint tenant to distribute the proceeds from the sale of the home according to his wishes after he dies.
The joint tenant is not legally compelled to follow John’s instructions. Unintended negative consequences could result.
Discuss Things with a Licensed Attorney
This has been a brief look at the pros and cons of joint tenancy. You may well have further questions. If you would like to discuss the matter with a licensed attorney, we invite you to contact our firm to request a free consultation.
We also invite you to read our free report, The Trouble with Joint Tenancy, by following this link: Free Trouble with Joint Tenancy Report.
- Generational Wealth is Key to Leveling the Playing Field - November 24, 2020
- Fair Isn’t Always Equal and Vice Versa - November 19, 2020
- Staying Current is Especially Important in the Pandemic - October 28, 2020