Joint ownership is when two or more people share ownership rights to a property or asset. This legal arrangement can greatly affect how an executor or personal representative can administer a person’s estate. There are several types of joint ownership, each with distinct characteristics, benefits and potential drawbacks.
Joint Tenancy with Right of Survivorship (JTWROS)
JTWROS allows multiple people to own property together, each with an equal stake. Upon the death of one owner, their portion automatically transfers to the surviving owners, avoiding the probate process. This often results in a quicker and potentially more cost-effective transfer of ownership.
However, this also means a person cannot leave their share of the property to someone else in their will. Moreover, if one owner has debts, creditors might be able to place a lien on the entire property. This can potentially affect all owners.
Tenancy in Common
Unlike JTWROS, Tenancy in Common does not require joint owners to have equal shares. For example, one owner could have a 70% interest while another has 30%. This allows for more customized ownership arrangements. An owner can also specify in their will who inherits their share of the property.
However, this also means that when one owner dies, their share becomes part of their estate rather than automatically going to the other owners. If there’s no will, the probate court will distribute their share according to Kentucky’s intestacy laws. This can potentially lead to delays and costs in transferring the property share.
Tenancy by the Entirety
This form of property ownership is exclusive to married couples. Similar to JTWROS, it allows for seamless transfer of property to the surviving spouse when one partner passes away without the need for probate proceedings. It also offers strong protection against creditors, as creditors of only one spouse generally can’t place a lien on the property.
However, if a couple goes through a divorce, their Tenancy by the Entirety typically ends. The property often becomes a Tenancy in Common instead. This change can make dividing property more complicated during divorce negotiations. The court usually steps in to decide how to split or handle the property.
Joint ownership can be complicated
If you’re dealing with jointly owned assets in an estate, consider consulting with an attorney. They can help you understand your rights, navigate potential complications and ensure proper handling of these assets during the process.