You have to beware of do-it-yourself estate planning solutions. Many people procrastinate when it comes to estate planning, though they know that they should have a plan in place. People who are in this position often decide to take matters into their own hands. With this in mind, let’s look at joint tenancy with right of survivorship in Smithtown NY.
Co-Ownership of Property
When you use joint tenancy with right of survivorship you are adding a co-owner to the title of your property. This co-owner is called a joint tenant. The right of survivorship allows the surviving joint tenant to inherit the entirety of the property (assuming there was just one joint tenant).
The transfer of property would take place outside of the process of probate. If you retained sole ownership of your property until the time of your death and left it to someone in your will, the transfer would not be complete until the estate had been probated.
Probate can be time-consuming, and there are costs that go along with the process. For these reasons many people choose to arrange for asset transfers outside of probate.
DIY types may hear about joint tenancy and see it as a way to simply and easily arrange for the transfer of their property.
Not So Fast
There are actually some problems that can arise if you use joint tenancy to transfer property. Let’s say that you add a joint tenant to the title of your home today. The joint tenant immediately owns half of your home.
Your intention is to leave the entirety of the home to your joint tenant after you die. This is just a means to an end in your mind. However, from a legal perspective, you no longer own the entirety of the home.
If your joint tenant runs into any type of financial problems, these difficulties are going to become your problems. The property held in joint tenancy is partially owned by the person that you added to your deed. As a result, this share of the property would be fair game for creditors, litigants, tax collectors, and former spouses-to-be.
It is likely that your home is the most valuable single piece of property that you own. You may have multiple different people on your inheritance list. Perhaps you would like to see the home sold so that the liquidity could be spread among multiple different people that you love.
Because you like to do things for yourself, you see a simple solution. You add a single joint tenant and instruct this individual to sell the home after you die and spread around the liquidity in a particular way.
Once you die, the surviving joint tenant owns the property outright. This individual is not legally compelled to follow your verbal instructions. Your desire to take matters into your own hands could ultimately result in unintended negative consequences.