Joint tenancy is the condition of joint ownership. Let’s say that you own a home outright. You can add a joint tenant to the deed, and the joint tenant becomes a co-owner of the property.
Joint tenancy can potentially be used when you are planning your estate. If you name your child as the joint tenant on the deed to your home, your child would inherit the property after you die.
This could be consistent with your wishes.
One of the advantages of joint tenancy is the fact that it enables the transfer of property outside of the process of probate. There is nothing inherently wrong with the probate process. However, it is time-consuming, so your child would wind up inheriting the home in its entirety more quickly if you were to use joint tenancy.
People sometimes hear about this and assume that joint tenancy is the best way to transfer property to their children outside of probate. In fact, there are some drawbacks that you should consider before you take this route.
Drawbacks of Joint Tenancy
You are taking certain risks when you add a joint tenant to the deed or title of your property. You have to understand the fact that the joint tenant immediately becomes a co-owner of the property. The joint tenant has just as much right to the property as you do, even though this individual may not have contributed to its purchase.
You made the decision to add the joint tenant, and you must live with the results.
Suppose you decide to sell property held in joint tenancy and use the proceeds to travel around the world. The joint tenant is not going to benefit from this course of action. However, the joint tenant must sign off on the sale, because you would be selling property that is partially owned by the joint tenant.
There is also the matter of any financial problems that the joint tenant may encounter. The property held in joint tenancy could be attached by tax collectors, creditors and litigants. It would also be on the table during contentious divorce proceedings.
Joint tenancy is an option that is available to you if you want to transfer property outside of probate. However, it is not your only option, and it may be a risky choice.
The best way to proceed when it comes to estate planning matters would be to sit down and discuss everything with a licensed attorney. Your lawyer will listen as you explain your situation. He or she will gain an understanding of your objectives and subsequently make recommendations.
Ultimately, you can emerge from the interaction with an ironclad estate plan in place that perfectly suits your needs.