The primary purpose of a Will is to determine how your property will be distributed after you are gone. A Will can handle the distribution of most of your assets, however, some assets do NOT fall under the purview of a Will, namely, assets that are jointly owned, as well as Trusts, life insurance and retirement plans. Knowing the difference between joint property relationships can help you choose ownership options to better plan your estate.

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Common types of joint property include:

Joint tenants (with rights of survivorship): Two or more people can own property together by jointly holding title to the property. When one owner dies, the surviving joint tenant(s) automatically become the owner(s) of the deceased tenant’s share of the property, without regard to the provisions of the deceased owner’s Will.  Joint tenancy can be a valuable tool for avoiding probate in small estates, particularly if the joint tenancy is between spouses. However, it can cause unintended results if the joint tenancy is between a parent and child (or other third party). Furthermore, joint tenancy can cause serious tax planning problems for spouses whose combined estates exceed the federal estate tax applicable exclusion amount (the estate tax disappeared in 2010, and it’s unclear what the exclusion amount will be in 2011 – it depends on whether or not congress passes new laws).

The rules on joint tenancy vary from state to state. In some states, a joint tenancy can only be established through a written document, and not by a mere oral agreement. In other states, the language of the written document must specifically state that the parties own the property “jointly with rights of survivorship.”

Tenants in common: Two or more people can own equal shares in a property as tenants in common. When one owner dies, his interest in the property goes to whoever he designates in his Will, and not to the other tenants in common.

This result is very important in estate planning for spouses who wish to minimize estate taxes through the use of a Trust, and for any other individuals who wish to set up Trusts under their Wills for any other purposes. Consequently, individuals with Wills that create tax savings. Trusts often own their joint properties as tenants in common to make sure that their share of joint property passes under the tax savings provisions of the Will, instead of automatically to the survivor.

Community property: Community property generally refers to property acquired by either spouse during the marriage, except property received as a gift or inheritance. In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, community ownership rules apply even though the property may only be in one name. Each spouse is considered to own one half of the community property, and can therefore dispose of his/her half of the property through a Will or Trust.

In some states, it may be important to file a document with the local county recorder or in the register of deeds to show that the joint owner has died and is no longer one of the joint owners of the property. This requirement can be handled by an executor, successor trustee, or surviving joint owner of the property.


Get Started Start your Joint Living Trust Answer a few questions. We'll take care of the rest.

Get Started Start your Joint Living Trust Answer a few questions. We'll take care of the rest.