David J Collier

Joint Tenancy Is No Substitute for an Estate Plan

You and your partner finally find the perfect real estate. At closing, your escrow officer asks how you would like to hold title. Without knowing why, you simultaneously blurt out, “JOINT TENANTS!”

Joint tenancy is a popular form of co-ownership, primarily because of its built-in “RIGHT OF SURVIVORSHIP.” This means that if one of the owners dies, the property automatically passes, despite any will, to the surviving owners, without the need for an expensive and time-consuming probate action.

But, joint tenancy does not eliminate your need for a will or other estate planning. Without estate planning, even property you acquire as joint tenants would pass at your death according to the state’s rules of INTESTACY in the following situations:

  • You are the last joint tenant to die.
  • You and the other joint tenants die simultaneously.
  • Your co-owner’s creditors attach his or her interest.
  • Your co-owner transfers, deeds, or borrows against the property, even if done without your consent or knowledge.

In addition, joint tenancy is often inappropriate for MARRIED COUPLES, because:

  • Property held by a married couple as joint tenants won’t get a full “step up in basis” at the death of the first spouse to die. This means that the surviving spouse may pay higher capital gains taxes when the property is sold.
  • Married couples holding title as joint tenants may not be able to sell, transfer, or mortgage the property while one or both are mentally incapacitated.
  • A divorce court may award the joint tenancy property of a divorcing couple to the surviving spouse if one spouse dies during divorce proceedings.

As you can see, joint tenancy does not eliminate the need for estate planning and may be an inappropriate method for you to take title. To discuss how you should take title or get started on an estate plan that fits your needs, please call me at 707-636-4806.

David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this advertisement. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.