What is Joint Ownership?
An experienced Estate Planning Attorney in Bakersfield can inform you of your options if you or someone you know is looking to establish joint ownership of a property.
Probate is the act of proving a will is genuine or broadly, “the process of administering an estate.” When you pass, your assets and finances will undergo the process of probate to sort out the details of your estate. Probate can be a long and arduous process for loved ones and beneficiaries. It can tie up your assets for months and can open them up to estate taxes which could, in some cases, deplete your financial standing significantly. Proper estate planning can help your loved ones avoid probate. Joint ownership is one way to keep your property out of probate.
Just as it sounds, joint ownership is when a property is shared by two or more people. There are several forms of joint ownership, all of which can help avoid probate when one owner dies.
The forms of joint ownership are:
Joint Tenancy With Rights of Survivorship
In joint tenancy with rights of survivorship or JTWROS, two or more people legally own a property. When one of those owners dies, the property simply stays under ownership of the remaining partner(s). The heirs of the deceased have no legal rights to the property.
Upon death of one of the owners, the surviving owners fill out a form and present it along with a death certificate to whoever keeps the records. Depending on what type of property it is, this could be a bank, state department of motor vehicles or county real estate records office.
Tenancy By The Entirety
In certain states, Tenancy by the Entirety exists. Abbreviated TBE, this form of joint ownership functions in the exact same way as Joint Tenancy with Rights of Survivorship, except it is restricted to just two people who are married or are registered domestic partners.
When a spouse dies, the other becomes the sole property ownership when a death certificate is presented to the property record keeper just as Joint Tenancy with Rights of Survivorship.
Currently nine states are considered Community Property States. In these states, property, income and debt acquired during a marriage is considered community property between spouses and an assumed 50-50 ownership exists.
Although simply stating in a will or trust that you wish your property to be otherwise distributed after death cannot override the community property laws. However, each spouse is able to bequeath their share of the property to a person of their choosing, like a child or other family member. If no heir is named, when one spouse passes, the property is automatically transferred, and the surviving spouse becomes the sole owner. Only a prenuptial agreement may supercede the community property laws in these states.
Tenancy In Common
As Tenants In Common, TIC, each owner of a property holds a percentage. Percentages do not have to be equal, instead they are determined by how much an owner contributes to the purchase of the property. Each owners share becomes part of that owner’s estate. It is named in the will and left to a person of their choosing upon death. The other owners, unless named as heirs in the will or trust have no claim to the other percentages of the property.
One pitfall with this type of property ownership is that as part of individual estates, the percentage can become subject to probate and the state’s will in the settling of an estate. This can put the property and the other owners in difficult position.
When considering the various types of joint ownership, consulting an experienced estate planning attorney will help you decide which is best for you and your family.
If you or someone you know is looking for more information on joint ownership, contact The Estate Planning Department at The Law Offices of Young Wooldridge, LLP. A estate planning attorney at The Law Offices of Young Wooldridge, LLP can inform you of options you may not know you have.