What Are the Pros and Cons of Joint Tenancy in California Probate?
Assets can be owned by more than one person. When real estate, a bank account, or other assets are identified by the words “joint tenants” or “in joint tenancy,” it means that the other joint tenant becomes 100% owner of the property if the joint tenant dies. If there are more than two joint tenants, the death of one of them simply reduces the number of surviving owners. Continue reading to learn more about the pros and cons of joint tenancy.
What Happens if the Decedent’s Will Contradicts the Transfer of Joint Tenancy Property?
Joint tenancy means that more than one person has full ownership rights over a property. The death of one joint tenant simply leaves the surviving one as sole owner. This arrangement supersedes whatever is written in the will.
Is Joint Tenancy the Same as Tenancy in Common?
In a tenancy in common, the co-owners of a property each own a share of the total. The shares may or may not be equal. Each share is subject to succession according to dispositions detailed in a will, a trust, or intestate probate.
Contrary to joint tenancy, tenancy in common may be subject to probate.
What are the Cons of Joint Tenancy?
Joint tenancy is not the best solution for assets that can increase in value over time, such as real estate. The reason lies in the capital gains tax that may be charged to the new sole owner of the property. In opposition to what happens to assets held as a tenancy in common or as community property, the surviving joint tenant does not receive a “stepped-up cost basis” to fair market value, which would allow him or her to avoid the capital gains tax. This problem, however, only arises if the calculated capital gain exceeds $250,000.
Talk to San Diego probate attorney Scott Grossman about your situation and any questions you might have about the pros and cons of joint tenancy. Call us at (888) 443-6590 or (888) 443-6590 for your FREE 30-minute telephone consultation.