Probate avoidance though joint tenancy

There are many techniques one may employ to avoid probate when planning how to care for or pass on an estate. One popular tool for probate avoidance is joint tenancy, which allows for two or more individuals to own a piece of property and avoid many of the tax implications of transferring that property upon the death of one of the owners.

It is possible for two or more individuals to own both real property, such as a home, and also personal property, such as a portfolio of stocks and bonds. In a real property scenario where two members of a family jointly own a home and one of them passes away, the surviving family member automatically assumes sole ownership of the entirety of the property, bypassing probate.

Things can get more complicated when it comes to joint tenancy of personal property. Often a financial institution will instate a limit on the number of individuals who are permitted to own stocks, bonds, or a simple bank account. It is not impossible to use this method to bypass probate, but it can make the division and assignment of assets to multiple individuals interpersonally treacherous. If, for example, someone were only allowed to assign one or two additional owners to a portfolio, despite having three children, the unassigned child could face difficulty receiving the intended portion of the portfolio upon the death of the original owner.

Despite the implicit complications of using joint tenancy to avoid probate, there are many scenarios in which it can be the best option for protecting assets and planning one’s estate distribution. As with any complicated estate management issue, the guidance of experienced and qualified legal counsel can help protect one’s rights and assets from unforeseen difficulties.