What Are The Advantages and Disadvantages of Joint Tenancy With Right of Survivorship?

Posted Dec 3, 2023


Joint tenancy is a reasonably regular set-up that involves real estate ownership by two or more parties. Common types of shared interests include tenancy in common, community property, or joint tenancy with right of survivorship. Each of these arrangements carries pros and cons. But joint tenancy with right of survivorship (JTWROS) can be helpful in the event of death.

Explaining JTWROS

JTWROS is a legal ownership structure consisting of two or more parties. Under this arrangement, each tenant has an equal share of the property. This means each tenant has an equal interest in the property and is responsible for financial responsibilities. 

JTWROS is common between married couples and parents and children. The arrangement can also be between non-related parties, like business partners. To set up a JTWROS arrangement, co-owners need to buy the property simultaneously. Additionally, the title or deed must show all co-owners’ names. 

In a JTWROS arrangement, the decedent’s share automatically goes to the surviving co-owner(s) when one co-owner dies. This arrangement's main benefit is avoiding a lengthy and expensive probate process. 

The Downsides of JTWROS

As is the case with various legal ownership structures, there can be downsides to a JTWROS arrangement like the following:

Asset distribution. The ROS designation is beneficial to co-owners. But it also means that a deceased co-owner’s heirs can’t inherit the property under a JTWROS arrangement. The surviving co-owners might bequeath the asset to the heirs. Or they might not. 

Relationship problems. A ROS arrangement works, assuming all co-owners get along. But, problems can occur if the relationship is unstable. In that scenario, neither of the parties can sell their share of a property or asset without the others’ consent.

Creditor issues. If the deceased person has outstanding debts, creditors could seize an interest in the property in lieu of payment.

Get Legal Help

While a JTWROS set-up can effectively avoid probate, it is a legal arrangement. As such, before entering into one, it’s a good idea to consult an attorney knowledgeable about such legal structures and their pros and cons.

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.

Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

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