People who own property together can ensure they inherit full rights to the real estate by developing a joint tenancy with right of survivorship agreement. In this type of contract, all surviving party members automatically inherit the deceased party's share of the property regardless of what is stated in the person's will or the state's inheritance rules. While this is a good way to avoid probate court, it's important to handle this agreement with care or it may accidentally be invalidated. Here are two ways this can happen.
Not Using the Right Wording
One of the most common ways joint tenancy agreements are invalidated is because the contracts and paperwork don't contain the correct wording. In many states, you must specifically note the agreement is a joint tenancy with the right of survivorship to ensure it is treated as such. For instance, if you purchase a home with your significant other and you're unmarried, you would need to make a note about the joint tenancy on the deed to enjoy the protection this agreement offers.
If you fail to make the proper notation, the agreement will be treated as a tenancy in common contract, which means the decedent's portion of the property will be disposed of according to the rules of inheritance in the state. This could pose a problem if there is someone who would automatically receive the property this way (e.g. a child, or a spouse from a previous marriage that wasn't legally dissolved).
Thus, it's important to research the appropriate joint tenancy laws in your state and make sure your documentation adheres to the requirements to avoid this problem.
Transferring Property Interest to Another Party
Another way joint tenancy is accidentally severed is when one party transfers his or her interest to another party before either original owners have died. For example, a father gives his share of land he co-owns with his girlfriend to his daughter. The right of survivorship would become voided, and the agreement would default to tenancy in common between the daughter and the father's girlfriend.
To avoid this, you must either include the survivorship language when you transfer your share of the property to another person or the new party and the co-owner must enter a new joint tenancy agreement between themselves to ensure it remains valid.
For more information about joint tenancy or ideas on other ways to ensure the co-owner of a piece of property gets full ownership after you pass away, contact a probate attorney.
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