Joint Tenants with Right of Survivorship

With the rising property prices, not all of us can really afford a lot of the stuff that's on sale. And purchasing a property for sale can be a pretty grueling affair, so you want to pick up the best option available and be done with it for the rest of your life. So what if the price happens to be a tad higher? In a case like this, the option on having joint tenants with right of survivorship seems to be a pretty good idea. Having this right means that you can buy the property of your choice and share the ownership of it.

Joint Tenancy

So joint tenancy is an agreement between two or more people who agree to purchase a property together. Joint tenancy is essentially a contract between the parties. While the joint tenancy agreement specifies the stake of each party in the property, generally the stake is equal. The joint tenancy agreement also specifies the rights of each party with respect to the property. For example if the property is owned by 2 people who are not married to each other and do not wish to cohabit the property, then they may choose how many months of the year does each person get to reside in the co-owned property. The joint tenants agreement also includes any accord struck by the parties involved related to extension of the property, any improvements to the property and the rights of the remaining partners should one partner choose to sell the stake in the property.

The joint tenants agreement makes for a pretty exclusive club which not any one can enter. For example, if one partner wishes to sell his stake, he cannot do so to just anyone and requires the consent of the rest of the parties. The right of survivorship too is a pretty interesting clause which more often than not, exists in the joint tenants agreement.

The Agreement

This type of agreement is pretty popular among married couples. The right of survivorship bit is a pretty simple one to understand. When a property is owned by joint tenants with right of survivorship, then on the death of one of the tenants, his stake in it will be passed to the rest of the partners in equal measure. So if a couple jointly own a piece of land with the above agreement, then the right over the whole property is passed on to the spouse at the death of the other spouse.

Of course there are a couple of things you need to keep in mind before entering into an agreement for joint tenancy with right of survivorship before becoming joint tenants.

• This agreement can lead to unintended heirs to the property. Basically, post the death of one partner, the ownership will be transferred to the rest of the partners and hence the right over the property cannot be given to another heir.
• This arrangement may not help avoid gift taxes, and federal estate taxes and state inheritance taxes still need to be paid on the property.
• Each party always has an equal share in the property owned.
• The joint owner can mortgage his share in the property, but with the consent of the other owners.
• Transfer of ownership from the deceased to the survivor involves no costs related to probate administration.

The crux of the matter is simply that at the death of one of the owners of the property, the stake of the deceased is equally passed on to the survivors, thus the stake of the survivors remains equal.