Pros & Cons of Taking Title as Joint Tenancy with Survivorship Rights

Pros & Cons of Taking Title as Joint Tenancy with Survivorship Rights

Joint tenancy — where two or more people own property simultaneously — provides a number of benefits but also carries some risks as well.

The primary reason property owners elect a joint tenancy ownership is for its rights of survivorship. If one of the owners dies, the property then passes automatically to the other owner(s). The requirements for joint tenancy include:

• Owners must have an equal ownership interest
• Owners must become joint tenants in the same deed at the same time
• Owners must take possession of the property at the same time

Advantages of joint tenancy with rights of survivorship

Avoid probate — The primary benefit of owning property as joint tenants with the right of survivorship is to avoid probate. If a decedent passed his or her other assets to heirs via a trust and beneficiary forms — or has a small estate — a joint tenancy with rights of survivorship allows his or her estate to bypass probate.

Survivorship rights — When the first property owner dies, the property then passes directly to the second owner, who establishes sole ownership by simply recording the death certificate of the deceased owner.

Profit sharing — Any rents or profits the property generates are usually shared by the joint tenants.

Disadvantages of joint tenancy with rights of survivorship

Exposure to creditors — One joint tenant’s creditors may be able to force the sale of a property to satisfy that joint tenant’s debts. The other owners may also be exposed to risk if one owner is going through a divorce or has filed bankruptcy.

No inheritance rights — Joint tenants do not have the right to transfer their ownership share in a property to heirs after they die.

Permission required — Joint tenants must get permission from other owners before making certain changes, such as a new mortgage or transferring an ownership share to someone else.

Gift taxes — If you change ownership in a property from a sole owner to a joint tenancy, this could trigger gift taxes unless the joint tenants are married to each other.

Jurado & Farshchian, P.L. assists individuals with a variety of Florida real estate and estate planning matters. Please call one of our experienced real estate and estate planning attorneys at (305) 921-0440, or email us atinfo@jflawfirm.com today.

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