Joint Tenancy and Community Property With Right of Survivorship Explained
The right of survivorship is an important legal right that allows property owners to keep property in the event of the co-owners death. Property held as joint tenancy, tenancy by the entirety, or community property with the right of survivorship automatically passes to the surviving property owner without going through the probate process. There is a difference between joint tenancy and community property with right of survivorship. Below is a detailed overview of the benefits of holding property with the right of survivorship as joint tenants or community property. Read on to learn more.
Joint Tenancy Overview
In California, most married couples hold real property as joint tenants with right of survivorship. Joint tenancy is a type of co-ownership of real or personal property between two or more persons in which each person owns an undivided interest of the whole. Because joint tenancy creates a right of survivorship, upon death, a party’s share of property will pass to the remaining joint tenant. For example, when a married couple shares real property as joint tenants, both spouses share equal ownership interest in the property. Upon the death of a spouse, his/her interest will automatically pass to the surviving spouse. The surviving spouse will be left with 100% share of the property. Because the surviving spouse automatically receives the property, probate can be avoided (at least until the surviving owner passes away).
Community Property with Right of Survivorship Overview
Similar to joint tenancy with right of survivorship, community property with right of survivorship ensures a surviving spouse receives the deceased spouse’s property share. Community property tenancy allows couples to own an undivided interest in the entire property. Spouses are not allowed to pass their property interest to someone other than their spouse in a will. This type of tenancy is restricted to married couples and registered domestic partners. Property will automatically pass to the surviving spouse without having to go through the probate process.
Difference between Joint Tenancy and Community Property with Right of Survivorship in California
When property is held as joint tenants in community property states, each spouse is prohibited from willing away his/her property interest. The spouse’s share of property is automatically given to the surviving spouse.
When it comes to paying taxes, talk to a tax consultant about the various tax implications as it pertains to property owned as joint tenants vs. real property held as community property with right of survivorship. There may be capital gains implications that you should be aware of.
Tenants in Common
Tenants in common is another way co-owners can take title to property. This default title will be implied between parties if no other title is specified. As a tenant in common, each party will own a specified portion of property pursuant to their ownership interest. Upon the death of a tenant in common, his/her share will pass according to the instructions of his/her will, or through intestate succession (if there was no will).
Married couples should consider the form of title of their jointly owned property. The forms of ownership mentioned above are some of the many and should be considered in the context of a couple’s estate planning desires. At A People’s Choice, we can help prepare the legal documents you need to set up the form of property tenancy that suits your estate planning needs. Picking the right type of tenancy can protect your property from the probate process and make sure your spouse obtains your home upon your death. Contact us for more information about the different real estate titles available to married couples and registered domestic partners in California.