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Message # 923 Joint tenancy

mp3 #923 What is Joint Tenancy? (mp3 file)


Joint tenancy is one of many ways for two or more people to hold "an interest in the same property at the same time. Property can mean both personal property--furniture, boats, cars, jewelry--and real property--homes, apartment building, land. If you want to share certain property with another person or several people, you may do so by joint tenancy. In order to put property in joint tenancy, a written transfer is required, stating that the property is held in joint tenancy, or by the owners as joint tenants.

Other ways several people may hold a joint interest in property are as tenants in common, in a trust, or in a partnership. A married couple may also hold property as community property, which is not the same as joint tenancy. You may wish to investigate which one of these types of ownership is best for your needs.

Joint tenancy is different from any other way for two or more people to own a piece of property because it gives all joint tenants the right of survivorship of each other. This means that if one of the joint tenants dies, his share automatically goes to the other joint tenants who survive him.

Because the property automatically goes to the other joint tenants, one advantage to joint tenancy is that no probate administration through court is required as to property held in such form. However, certain legal proceedings may be required for the proper termination of a joint tenancy interest clearing the property of tax liens and placing it of record name in the survivors. Probate is the legal process for changing ownership of property from someone who has died to the beneficiaries named in a will or surviving relatives who are to receive the property. Many people put their property in joint tenancy just because they want to avoid the expense and delay of probate.

Joint tenancy is not a way to avoid paying taxes. Estate taxes could still be payable on interests received by survivorship in joint tenancy, and the creation of joint tenancy ownership may result in the transferor having to pay gift taxes. Joint tenancy may cause other disadvantages involving property tax assessments and increasing capital gains taxes. Each case is different, however, and before you make up your mind, you should talk to a lawyer who can advise you as to matters for you to consider in deciding which way is best and least expensive for you.

As previously stated, there are certain procedures that must be followed after the death of a joint tenant in order for the legal title of the property to be effectively placed in the name of the surviving joint tenants. In the case of real property, two documents are needed:

A certified copy of the death certificate of the person who died, and

And affidavit of the death of that joint tenant, to be recorded together by a surviving joint tenant in the office of the recorder in each county where the real property is located.

California repealed state inheritance and gift taxes in 1982, but for those joint tenants who died prior to the effective date of that repeal, it may be necessary to file a state inheritance tax return and record a release of tax lien in each county where the real property is located.

Sometimes a court order is also required, which can be obtained only after filing an appropriate petition in court. An attorney can help you obtain or prepare these documents.

If you have questions about the benefits of owning property in joint tenancy, or how to put the benefits of owning property in joint tenancy, seek legal advice to be sure you will be protecting your interests.

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