If your estate is simple enough that you don’t want to use a trust, there are other ways to transfer property without probate. For example, joint tenancy can ensure that your asset is automatically transferred when you die. Given all the different options available for avoiding probate, it’s sometimes surprising that some people focus all their attention on trusts. Our estate planning lawyer recommends that you at least consider joint tenancy.
Doesn’t New York law assume shared tenancy?
Some people who own property together naturally assume that they already have joint tenancy. What they have, however, is tenancy in common – which is a different kind of ownership structure that doesn’t automatically provide any right of survivorship for those tenants. That can be a problem since it leaves the property to pass to the decedent’s heirs in accordance with his will or the state’s laws governing intestacy. Joint Tenancy is a very different type of ownership and eliminates any concern about how the property is transferred when one of the tenants dies.
What is joint tenancy?
Joint Tenancy with right of survivorship is a type of ownership in which the owners of a property share equal ownership of the asset. When one of them dies, the surviving owners automatically receive ownership without the need for probate or other complex ownership transfer mechanisms. The ownership involves equal shares for each of the owners while providing all owners direct and complete access to the entire asset.
How can you create a joint tenancy?
It’s important to understand that you can’t just take a property that you own and suddenly declare that you own it in joint tenancy with others. There are specific requirements that must be met in order for the asset to qualify for that type of ownership.
New York is somewhat different than some other jurisdictions, however, since it is possible to create a situation in which some owners have joint tenancy interests, while others have only tenants in common interests.
Married couples and joint tenancy
Married couples are an oddity when it comes to ownership as a union. Property that ends up being conveyed to any married couple is automatically presumed to be owned using a form of ownership known as tenants by the entireties. That’s the default ownership type, anyway. The couple does have the option of having the deed declare them as tenants in common or joint tenants, though that would be a pointless exercise. After all, tenancy by the entireties provides the couple with the same type of rights of survivorship available to joint tenants, but with an added benefit: neither tenant can transfer ownership to a third party in a way that destroys the tenancy. Under the rules governing tenants by the entireties, a surviving spouse will still maintain complete rights to the entire property even if the dead spouse had sold his or her interests to another person.
Severing the tenancy
Of course, it’s also important to know how to sever such a joint tenancy – since circumstances chance and you may not always want to continue that type of ownership. Fortunately, severance can be accomplished without much trouble. All that you need to do is transfer your interest in the property to an outside party.
You can do this at any time, without asking for or receiving permission from any of the other tenants. Once that is accomplished, it automatically severs the joint tenancy. At that point, you can even regain your own interest if you wish, without restoring the joint tenancy. That can be useful to know if you establish a joint tenancy for inheritance purposes and then change your mind at some point in the future.
Using joint tenancy as part of your estate plan
Obviously, joint tenancy may not be the ideal solution for every family, but it can come in handy in situations where you want to ensure a smooth transfer of certain properties while most other assets await probate. Along with life insurance and retirement account beneficiary designations, and payable-on-death designations for savings and brokerage accounts, joint tenancy can help to secure quick ownership transfers without any involvement from the probate court.
That’s an incredibly important benefit in case where your estate may be so simple that you don’t want to use advanced planning tools like trusts, but also want to ensure that your dependent survivors aren’t waiting for months to receive your most valuable assets. In those instances, the formula is simple: use these alternative asset transfer methods to get certain properties into the hands of your heirs, and allow the will probate process to handle the rest.
If you have questions regarding joint tenancy or any other estate planning matters, please contact the experienced attorneys at the Law Offices of Mary A. Miller, P.C. for a consultation. You can contact us either online or by calling us at (914) 939-6565. We are here to help!