Probate is a legal process that can enter the picture when assets are being transferred after someone dies. This procedure is time-consuming, it is expensive, and probate is a public proceeding, so privacy is lost.
There are some types of transfers that are not subject to probate, and property that is transferred through joint tenancy is one of them. In this post, we will provide an explanation of joint tenancy and right of survivorship.
We will also look at a similar condition called tenancy in common, because it is important to understand the distinction from an estate administration perspective.
Property that is held in joint tenancy is owned by two or more people, and the joint tenants will own equal shares of the property. In order for the condition of joint tenancy to exist, the co-owners of the property must share “four unities.”
The respective interests in the property must be acquired by the joint tenants at the same time, and they both have to be listed on the same ownership document (unity of title).
They must have the same interest in the property as we have stated, and they are required to have unity of possession. This means that all (or both) of the joint tenants will have an equal right to utilize the entirety of the property that is held in joint tenancy.
After the death of one joint tenant, the surviving joint tenant or joint tenants would inherit the ownership share that was owned by the decedent. This transfer would not be subject to the probate process.
In order for the property to be sold, all of the joint tenants must work in cooperation.
Tenancy in Common
There is another form of concurrent ownership that is similar called tenancy in common. With this type of arrangement, equal ownership shares are not required.
For example, there can be a tenancy in common between three people. One person can own 50 a percent share, and the other two tenants can own 25 percent of the property each.
A tenant-in-common can transfer their interest in the property or even mortgage their interest without the consent of the other tenants. They could bequeath their share to someone in a will, but this transfer would be subject to probate.
We have stated that a joint tenant cannot sell the property without the cooperation of the other joint tenant. However, a joint tenant could sell their share of the property to someone, but that would terminate the joint tenancy. The buyer would enter into a tenancy in common with the other tenants.
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