How Joint Tenancy Can Bypass Probate Laws

It is commonplace for couples to own their homes as part of a 'joint tenancy with right of survivorship' agreement

. Joint tenancy means the ownership of a property is shared equally. Should one of the owners die, the property is transferred to the surviving tenant automatically, bypassing probate law.

When a person dies, their will is reviewed by a probate court. The court decides whether the will is legally binding and establishes what liabilities and assets the deceased has. After paying back debts, any remaining assets are then divided amongst the heirs. This is seen by many people as a lengthy and expensive process, which is why avoiding the probate process is popular.

Instead of waiting months for the probate process to conclude, ownership of the property automatically transfers to the surviving owner. This is particularly beneficial when the heir needs the money immediately.

There are potential problems with entering a joint tenancy to bypass probate. Sharing ownership of the house means all parties have equal rights, and can sell or re-mortgage their share as they wish. When the property is passed over after death, it happens without condition; the surviving owner can do what they want with the property, and are well within their rights should they choose to sell it.

he transfer of ownership over-rides any provisions made in the will. For example, a widower enters into a joint tenancy with his daughter, but says in his will that he wants his son and his daughter to inherit half of the property each. When he dies the property is automatically transferred to his daughter and his son has no entitlement to the property.

However, for many people, the benefits outweigh the issues. You can create and dissolve ownership as you wish; it's seen as cheaper, easier and more flexible than formally creating legal documents such as wills and trusts.

Another option for shared property ownership is 'joint tenancy in common', but this type of ownership doesn't bypass probate. Should one of the owners die, their share of the property is transferred to relatives, unless specified otherwise in the will and is subject to all parts of the probate process.

by: Luke Scott

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