Joint tenancy with right of survivorship is a useful tool for holding title to property and for planning the transfer of that property upon one's death. Joint tenancy is the most common form of ownership for residences and checking accounts between husbands and wives. It is used less frequently with other family members. The fact that joint tenancy is widely used does not mean that everyone fully understands what it is and when it should be used.
The main characteristic of joint tenancy is that the surviving joint tenant takes the property (whether the property is real estate, a bank account, a stock, a bond or mutual fund account) upon the death of the other joint owner regardless of what the Will or other estate plan of the deceased person may provide. This may not be the intent of the original joint tenants because it bars descendants, heirs or beneficiaries other than the other surviving joint tenants from receiving any interest in the property.
Other aspects of a joint tenancy, which should be considered, are that all joint tenants must agree to the sale of mortgage of real estate and to the sale of registered stocks and bonds.
Any one joint tenant may withdraw all or a part of the funds in a joint bank account. Any co-owner may redeem U.S. Treasury Bonds.
The creation of a joint tenancy has important legal consequences. Estate, gift and income taxes may be effected as well as the distributions that are specified in your Will.
Joint tenancy may have other consequences. For example, if property of any kind is put into a joint tenancy with a relative who receives public assistance or other benefits such as social security disability, the relative's entitlement to these benefits may be jeopardized. Further, the creditors of the joint tenant may seek to collect a debt from the property or from the proceeds resulting from a forced judicial sale.
Joint tenancies are useful in certain cases. However, joint tenancies are not a simple solution to estate problems and can create problems where none existed. For a full explanation of the advantages and disadvantages of joint tenancy in your particular situation, you should consult your attorney.