Avoiding Probate Joint Tenancy

Avoiding Probate – Joint Tenancy

The purpose of probate is to ensure that your estate gets properly distributed to your heirs. Most people seek to avoid probate because it can be expensive, inaccurate and slow. Probate can slow down the transfer of estate property for many months, sometimes for years.

Probate may also be expensive, with certain professional fees being paid out of the estate itself, leaving less for the heirs to share in at final distribution.

While the living trust is the most flexible device used to avoid the costs and delays of probate, several other devices are also available. These can be used in conjunction with the living trust or, if your property holdings are simple, instead of the living trust.

 The most important of these devises is the “joint tenancy”. Joint tenancy is a form of shared ownership, with the key feature being the “right of survivorship”. This means that while the joint tenants equally share ownership during their lifetimes, when one joint tenant dies, his or her interest is extinguished, leaving the surviving joint tenant(s) with sole ownership.

Can a will “break” a joint tenancy?

“My dad left a will which left all of his property (including his home) to me and my brother. But a few years before he died he had placed his home in joint tenancy with my sister. Who gets the home?”

Your sister gets the home – unless you and your brother can prove that the joint tenancy was established “for convenience only”. This would be very hard to prove, particularly when the asset transferred is real estate. Therefore, because the right of survivorship attaches to joint tenancy property, your dad’s interest in the home probably passes automatically to your sister on his death. The right of the surviving joint tenant is superior to that of heirs of the deceased joint tenant.

 What is a joint tenancy for convenience only?

“A few years ago after my father suffered a heart attack, he put my sister’s name on his bank account, making her a joint tenant with him. He did this so that she could have access to his funds to pay his bills if he became incapacitated. Dad recently died. His will leaves all his property to his three children equally. My sister claims she should take all of the funds in the bank account and only the rest of Dad’s property should be divided among us. I don’t think this is what Dad wanted.

Who will get the funds in the bank account?

This is a tough question. In some states the courts will simply go by how title is held, so they would give the funds to your sister as the surviving joint tenant. But in many states, especially when dealing with joint bank accounts, the courts will look behind the title. If you can prove that your dad did not want to convey ownership to your sister but set up the joint account simply “for convenience only”, you have a good chance of having the bank account pass under the terms of your dad’s will to all three of his children. You should see a lawyer experienced in estate planning to discuss this.

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