Common Questions:

What is joint tenancy?

A joint tenancy is a form of shared ownership, with the key feature being the "right of survivorship". This means that while the joint tenants equally share ownership during their lifetimes, when one joint tenant dies, his or her interest is extinguished, leaving the surviving joint tenant(s) with sole ownership. This is the Right of Survivorship.

Are there advantages of joint tenancy?

The primary advantage of joint tenancy is the automatic transfer of ownership upon the death of one of the joint tenants. An asset that is passed from a deceased joint tenant to the surviving joint tenant(s) would not have to pass through the probate estate of the decedent.

What are the disadvantages of joint tenancy?

Joint tenancy involves the co-ownership of a certain piece of property. There may be a difference of opinion among the co-owners as to the management of the property. These differences can affect decisions on many levels such as management and income.

Can joint tenancy substitute for a will?

Joint tenancy does not take the place of a will and it applies to a particular piece of property only. A will can be changed as often as desired but a change in joint tenancy would require the permission of all parties involved.

How is joint tenancy dissolved and can one joint tenant sell there interest?

Usually, each joint tenant owns an equal share in the whole property. Thus, if one joint tenant has a buyer for this share and there is no limitation between the joint tenants, then the sale may occur. The details should be part of the original agreement.

How does joint tenancy affect taxes on the death of a joint tenant?

Upon the death of any person, there are several different types of taxes that may be imposed that may affect joint property. These taxes include federal income tax, federal estate tax, federal gift tax, and if applicable state inheritance tax. Tax laws frequently change.

The implications of tax laws should be considered when making the decision concerning the use of joint tenancy. It is therefore important to consult with an attorney concerning these issues. Before entering into any legal agreement always consult tax and legal advice.

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