What does "right of survivorship" mean?

October 2, 2023

When it comes to property ownership, one of the common and advantageous arrangements is known as "Joint Tenancy with Rights of Survivorship" (JTWROS).  This legal concept offers a unique way for individuals, often family members or spouses, to co-own property.  In this blog post, we will delve into the intricacies of Joint Tenancy with Rights of Survivorship, exploring what it means and why it can be a beneficial choice for co-owners.

What is Joint Tenancy with Rights of Survivorship (JTWROS)?

Joint Tenancy with Rights of Survivorship is a form of property ownership where two or more individuals hold equal shares of a property with the added benefit that, upon the death of one owner, their share automatically passes to the surviving owners. This transfer happens without the need for probate, which is the legal process of distributing a deceased person's assets.

Key Characteristics of JTWROS:

• Equal Ownership: All owners in a Joint Tenancy scenario hold an equal share of the property.  This means they have an equal stake in the ownership, regardless of their financial contribution.

• Right of Survivorship: The most distinctive feature of JTWROS is the right of survivorship.  When one owner passes away, their share immediately transfers to the surviving owners, bypassing the complexities and delays of probate.

• Unilateral Action: Any owner can sell or transfer their share without the consent of the other owners.  However, doing so converts the ownership from joint tenancy to tenancy in common, negating the right of survivorship for the new owner.

Benefits of Joint Tenancy with Rights of Survivorship:

• Avoiding Estate Administration: One of the significant advantages of JTWROS is that it simplifies the transfer of property upon an owner's death. This streamlined process can save time, legal fees, and potential disputes among heirs.

• Continuity of Ownership: The right of survivorship ensures that the property remains in the hands of the surviving owners, maintaining the stability of ownership structures, especially in family-owned properties.

• Tax Implications: JTWROS can have potential tax benefits, especially concerning inheritance and capital gains taxes. Consulting with a tax professional can provide insights into the specific advantages in your situation.

Considerations and Caution:

• Mutual Trust: Joint Tenancy requires a high degree of trust among co-owners, as any owner can sell or transfer their share unilaterally.

• Legal Advice: It is essential to seek legal advice when setting up Joint Tenancy. A qualified attorney can ensure that the ownership structure aligns with your intentions and legal requirements.

• Estate Planning: While JTWROS simplifies the transfer of property, it is not a substitute for comprehensive estate planning. Other assets and contingencies should be addressed in a well-rounded estate plan.

In conclusion, Joint Tenancy with Rights of Survivorship can be a valuable tool for co-ownership, providing simplicity, continuity, and potential financial benefits. However, careful consideration, legal advice, and mutual trust among owners are essential to maximizing its advantages and ensuring a smooth transition of property ownership.  If you are interested in our firm helping you with establishing or changing the nature of your property ownership with other person(s), please visit our "Contact Us" page or give us a call at (308) 728-3676.

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