Joint tenancy is a common practice in Florida. However, it’s important to know that there are both pros and cons of it if you want to avoid having the real property go through probate. When you have all the information, you can decide whether a joint tenancy is worth it for each party.
What is joint tenancy?
A joint tenancy is a legal agreement among two or more people who own property together. It comes with a right of survivorship and often occurs among married couples, family members, or business partners. Examples of the property can be real estate or even a bank or brokerage account. Through joint tenancy, each party owns the entire property instead of just a percentage of that property.
If one of the owners of the property dies, their ownership passes on to the surviving owner or owners. This allows for avoiding going through probate. While estate planning, there may be rules for what happens to the property, but generally, the other owner or owners inherit that person’s share.
How does joint tenancy work?
Typically, joint tenancy is the type of ownership agreement that applies when people buy real estate together. The parties can decide what they want to do with the property, such as rent it out or sell it. Upon purchasing the real estate property, the owners sign a title or deed, which gives them each or all equal shares of the property.
Pros and cons of joint tenancy
Joint tenancy while estate planning has certain pros and cons. The pros include the following:
• Right of survivorship: If one owner dies, the interest they had in the property immediately goes to the remaining owner or owners, which avoids probate.
• Equal rights: Each party has equal rights to the property. No one party has more share than any of the others.
• Security: There’s a sense of security when each party shares the financial responsibilities of the property.
The cons of the joint tenancy include the following:
• Everyone must consent to sale: With joint tenancy, each party must consent to the sale. In other words, if there are five owners and one object, the property cannot be sold.
• Can’t alter survivorship: If one party dies, their share cannot be given to an heir. Only the surviving owner or owners can get their interests.
• Sharing debts: If one party amasses debts, the other party or parties have the burden of sharing those debts.
It’s important to weigh out the pros and cons of joint tenancy to determine if it’s right for you.