If you are currently considered co-buying a piece of property, then you will want to take into account how you will arrange the title. If you choose a joint tenants with right of survivorship (JTWROS) arrangement, then this will have direct implications on the future of your estate. In this situation, both you and your co-owners all have the same right to the property, and are allowed to enjoy the entire property without reservations. Also, all individuals have an equal share of the property. This means that if you own with one person, then that one person owns 50% of the property, and you own 50%. If you own with three people, then each person owns a third. This arrangement is beneficial as it is an easy way for people to divide their property fairly.
When you pass away, the property that you own in a JTWROS agreement will be transferred and divided among the surviving owners. This means that you will inherit their share of the property if they pass away, and they will inherit yours should you pass away. This can be a beneficial way to skip probate and avoid any complicated legal procedures regarding property. It can also be frustrating if you would like to will your property to your children someday, but cannot because of your arrangement with the co-owners.
If you hope to grant your property to your children in the future, then you should explore the option of a joint tenants in common title when you co-buy a home. This is a title that will allow you to keep a specific share of the property and will that share to your beneficiaries in the future. With a JTWROS arrangement, you will not be able to do this. Even a will cannot terminate the agreement that you have made to contribute your share of the property back to the other property holders in the future. The joint tenancy is normally irrevocable, but it is taxable as a gift at the time that the deed is executed.
Also, during the life of the tenancy, the creditors of both tenants can contact each owner for reimbursement. This means that one part of the tenancy is the agreement ot be liable for mortgage payments that the other owner may fail to pay. When a tenant dies then the decedent's creditors lose their rights against the property because it is transferred, so eventually those creditors will not be allowed to contact the other party.
The largest pro to a joint tenancy is the fact that it can be transferred outside of probate. The tenancy can also be kept somewhat confidential in case you don't want others to know who will inherit the property. This is the best arrangement for a husband and wife, who are certain that they will inherit each other's portion of the home when that person dies. As well, domestic partners may want to consider this method. If a parent wants to c-own with a child, or if two partners go in on a home as part of a business deal, then these are all reasons that a JTWROS arrangement may be the best choice.
If you want more information about these arrangements then you need to talk to a probate attorney or an estate planning professional. A local estate planning contact can help you think through all the different implications of joint tenancy and help you to determine whether or not it is the best option for your lifestyle or family. Get started by locating an attorney on this directory!