There are some complicated ways of explaining relatively simple processes. This comes into play when you look at joint tenancy with right of survivorship.
Joint tenancy is one way to add a co-owner to property that you own, and the person that you add to the title or deed would become a joint tenant. Right of survivorship is the right of the surviving joint tenant to inherit the entirety of the property after the other joint tenant passes away.
Estate Planning Solution?
Joint tenancy can seem like a logical estate planning solution. Let’s say that you ultimately want to leave your home to your daughter. You could make your daughter a joint tenant, and she would own half of the home. After you die, your daughter would inherit the entirety of the home.
One of the major positives that would go along with this course of action is the fact that the transfer of ownership would not be subject to the probate process. If you were to hold onto the property and pass it along through the terms of a last will, your daughter would not assume ownership until the estate was probated and closed by the court.
This process can be time-consuming, taking anywhere from perhaps eight or nine months to a year in many cases. Contested and/or complex cases can take much longer.
Drawbacks of Joint Tenancy
Though joint tenancy can seem like a simple solution, there are some difficulties that can arise if you go this route.
When you plan your estate you typically arrange for asset transfers after you die, because you want to retain ownership while you are living. With joint tenancy, you are making the joint tenant a co-owner of the property right away. If you wanted to sell the property, you would need the approval of the joint tenant, and he or she would be entitled to a share of the proceeds.
There is also the matter of attachment. If the joint tenant was to run into financial difficulties, creditors could go after the property that is held in joint tenancy. Litigants could also seek to attach the property, and it could be in play if the IRS was looking to collect back taxes.
Learn More About Joint Tenancy
In this post we have just scratched the surface. If you would like to obtain some in-depth information about joint tenancy, we have a great resource that you can access free of charge.
Our firm has prepared a series of free special reports, and one of the reports covers the pros and cons of joint tenancy. To obtain access to your copy, click this link and follow the simple instructions: Joint Tenancy Special Report.
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