A joint tenancy with right of survivorship (JTWROS) means that you and one or more other people own the property together as joint tenants with right of survivorship. When one tenant dies, the surviving tenants inherit the deceased tenant’s share of the property. With JTWROS, there are no probate fees because the property passes to the surviving tenants without going through probate court . One way to think about this type of ownership is that it combines all of the benefits of co-ownership with few or none of the drawbacks associated with co-ownership and single ownership.
The Basics Of Joint Tenants With Right Of Survivorship (JTWROS)
Joint tenants with right of survivorship (JTWROS) is a legal structure where two or more parties share ownership of assets or accounts. The account’s assets are equally shared among the tenants, and every tenant has survivorship rights in the event of the death of one or more account holders. On the death of another member, the surviving member inherits the total value of that other member’s share of property.
To be clear, this shouldn’t be confused with someone who rents an apartment. Under the title law, a tenant is someone who owns property.
We are only discussing what is legally termed Joint Tenancy with Rights of Survivorship. That being said, examples of possible JTWROS assets include bank accounts and stock shares. However, here we are specifically discussing ownership of real estate.
When co-owners of property share a right of survivorship, it means that one of the co-owners shares will be transferred to the living co-owners if the other co-owner passes away. Though ownership of real estate is shared equally in life, the living owners inherit all of their deceased co-owners’ shares.
People typically speak of an individual’s legal right to a property as holding title. A common way for co-homeowners to hold title is JTWROS, which often applies to two people but can involve any number. In such a case, the share of each person is equal to that of the others.
Let’s take the case of a married couple who buy a house and hold title as JTWROS. That means they both have an equal right to the property, even while they’re both alive. Neither of them can sell the home or put a lien on it without the approval of the other owner.
Right of survivorship is when ownership of a property (in a JTWROS) transfers to another party on the death of the current owner. For example, for a married could with JTWROS, when one spouse dies, the interest in the property automatically passes to the surviving spouse, and doesn’t need to go through probate or can’t be left to any heirs.
Keep in mind that every state has different rules and laws regarding joint property ownership and inheritance. If you’re thinking about whether to use a JTWROS title for you, it may be good to talk to an attorney.
Benefits Of Joint Tenants With Right Of Survivorship (JTWROS)
Setting up a JTWROS takes care of things once the owner dies, bypassing the probate process which confirms that the deceased person’s will is valid and has accepted it to be a legal document. Bypassing probate is great because heirs of the deceased can’t inherit their property as they would have if there had been a probate. That is to say, the last living individual owner of the property owns all of the assets and will put them in his or her estate.
As well as avoiding probate, survivorship gives the party(s) who survives without a will control over assets previously owned by the deceased. This includes a party who has chosen to not sign a will and bypass the court process.
Each owner in a joint tenancy with rights of survivorship (JTWROS) must put in the same share of money to cover the cost of property taxes, maintenance, or repairs. As a result, the responsibility is shifted away from one person and placed among everyone else in the relationship.
Drawbacks Of Joint Tenants With Right Of Survivorship (JTWROS)
The most obvious disadvantage of this kind of agreement is that people cannot leave their ownership stake to their heirs. People who want to own property but do not want to give survivorship to the other owner should not consider this kind of agreement.
In order to enter into an agreement like JTWROS, all parties should ensure their relationship is stable and solid. If relations between parties deteriorate, it can hurt the agreement.
Prior to entering into a JTWROS, individuals should be certain they can afford the asset. Financial strains can make the arrangement difficult, especially when one individual is doing the bulk of the work. Suppose one individual can’t meet his or her financial obligations, such as repairing a home or making mortgage payments, this would have a negative impact on the other party.
Entering Into A JTWROS Agreement
Co-owners must acquire their equal shares of the property at the same time with a JTWROS title.
The buyers will have to decide how they want to take title to the property when they purchase a home.
There are various ways co-owners may hold title to the property, each with its own benefits and drawbacks, so you may wish to speak with a real estate lawyer about which option makes the most sense for you and your co-owners.
Final Remarks On Joint Tenants With Right Of Survivorship
A special agreement can ease the load of owning property on your own, but it can put a strain on your finances. This type of agreement is referred to as joint tenants with the right of survivorship. It provides equal ownership of the asset as well as equal responsibility.
It’s important to remember, though, that your share goes to the surviving tenant if you die. If you want to leave your share to heirs, you’ll need to become a tenant in common. No matter what route you choose, always consult a financial or legal professional that you can trust.