Your estate must pass through probate when you retain personal control of your property and arrange for its transfer through the execution of a last will. Probate is often avoided because of the fact that it is time-consuming and potentially expensive. One way that you could transfer property outside of probate would be to utilize joint tenancy with right of survivorship.
A joint tenancy exists when more than one person owns property. You could add a joint tenant or co-owner to your property, and this individual would have equal ownership rights. Because of the right of survivorship, if you were to pass away the surviving joint tenant would become the sole owner of the property. Probate would not be a factor.
It should be noted that there can be more than two joint tenants. If you died and there were two or more joint tenants surviving, they would share ownership of the property equally.
On the surface joint tenancy can sound like the ideal solution when you are planning your estate. However, there are some problems with joint tenancy that you should understand before you decide that this is the probate avoidance tool that you want to utilize.
For one thing, you are only delaying a probate proceeding. If you pass away the property that was held in joint tenancy would not be subject to the probate process. However, the property in question would be subject to probate when the last surviving tenant passed away.
Clearly, you are going to bring on a joint tenant that you trust implicitly. Be this as it may, you have to understand the fact that you are taking an enormous leap of faith. The joint tenant has equal rights of ownership, and this has significant implications.
For example, the property cannot be sold unless both (or all) of the joint tenants sign off on the sale. Another thing to take into consideration is the fact that litigants seeking redress from the joint tenant could seek to attach the property.
The same thing is true with regard to financial problems. If a tax lien was imposed on one of the joint tenants the jointly owned property could be attached.
There is also the matter of an unintended disinheritance. Let’s say that you added a single joint tenant to avoid probate, but you actually wanted the value of the property spread among multiple heirs when the joint tenant died.
There is nothing to guarantee this outcome. If there is just one joint tenant he or she would be the sole owner after you die, and there is nothing compelling this individual to comply with your wishes.
If you want to avoid probate there are alternatives to joint tenancy. Feel free to contact our firm to schedule a free consultation if you would like to discuss them.