What is joint tenancy? Is it true you don’t need an estate plan if you hold title in joint tenancy?
Joint tenancy with right of survivorship (sometimes abbreviated as JTWROS) is a form of holding title to an asset. When one joint tenant dies, the property passes to the surviving joint tenant. Probate is not required; the surviving joint tenant simply records a document called “Affidavit-Death of Joint Tenant” along with a certified copy of the deceased joint tenant’s death certificate. There are some problems with joint tenancy:
-If the other joint tenant fails to survive you, probate will be necessary to determine who should receive the asset;
-Property held in joint tenancy does not receive a full stepped-up basis for capital gains tax purposes;
-Placing someone’s name on your property as a joint tenant in order to avoid probate may subject you to adverse gift tax consequences or may expose the property to the other joint tenant’s creditors.