A right of survivorship is a legal property interest that can play a significant role in your estate plan, especially if you’re worried about probate. Rights of survivorship, often referred to as joint tenancies with a right of survivorship, are a form of property ownership that can be used with almost any kind of property. They are most commonly used with real estate and some financial accounts. While your estate planning lawyer will explain in more detail the benefits and drawbacks of a right of survivorship, here are some facts you should know.
Joint Tenancies with the Right of Survivorship
A joint tenancy is a form of property ownership in which more than one person owns the property. Each co-owner is known as a joint tenant. With a joint tenancy with a right of survivorship, or JTWROS, each co-owner has an equal share of the property. When the other joint tenant(s) dies, the surviving owner becomes the sole owner automatically.
Survivorship and Probate
When people die leaving behind property, that property must first be probated before new owners or inheritors can become the new owner of that property. The legal process through which this property transfer takes place is called probate.
One of the main benefits of joint tenancy with the right of survivorship is that the surviving joint tenant becomes the sole property owner automatically upon the death of the other joint tenant. When people own property in a JTWROS, there is no need for the property to pass through probate after the death of a co-tenant.
Probate avoidance is often a key part of estate planning. While probate is not typically as difficult or expensive as many people believe, it is almost always best to avoid the process whenever possible. An estate plan that focuses on probate avoidance allows the estate property to pass more easily to inheritors. Such plans can also allow the estate to avoid the fees and expenses associated with the probate process.
JTWROS and Inheritance Planning
When a co-tenant becomes the sole owner of a property after the death of all the other co-tenants, that property will have to be probated before new owners can take possession. However, transferring the property outside of probate is still possible if the sole owner acts in advance. For example, if you create a revocable living trust and transfer the property into the trust’s name, the trust can distribute the property after you die, and can do so outside of probate.
If you’re considering using a JTWROS as a part of your estate or inheritance plan, there are other issues you will need to consider. Always talk to your lawyer first before you make any decision that might affect your estate.