Joint Ownership With Right of Survivorship & Legally Transferring Property
Property jointly owned with right of survivorship may pass to the surviving co-owner without probate. Many types of property, such as bank accounts, vehicles, and securities, may pass in this way, but the most common type of property owned jointly with right of survivorship is real estate. Even though a co-owner will be able to take ownership of the property without probate, they may still need to complete certain formalities to retitle the property. A surviving co-owner will typically be required to execute a sworn statement or other documentation and provide a certified copy of the death certificate to the correct entity, such as the local public land records office for real estate.
Property Held in Joint Tenancy or Tenancy by the Entirety
Property co-owned in joint tenancy or tenancy by the entirety may pass to the surviving co-owner without the need for probate. However, a co-owner may still need to execute certain legal documents for an entity such as a property records office, a bank, or a motor vehicle department to complete the transfer. If the surviving co-owner was married to the decedent, they may only need to execute a sworn statement. Surviving co-owners who were in a registered civil union or domestic partnership with the decedent may also qualify for a simplified procedure.
Joint tenancy and tenancy by the entirety are very similar, although tenancy by the entirety may only be between married couples or people in domestic partnerships or civil unions. An executor may find that property is held in joint tenancy or tenancy by the entirety through documentation related to the property, such as a property deed or a bank statement. State law may also presume that married couples hold certain property in joint tenancy or tenancy by the entirety. However, property that was once held in joint tenancy might not still be held in that way. Certain actions, such as one joint tenant’s decision to give their interest in the property to someone else, may break the joint tenancy. Tenancy by the entirety cannot be broken, and thus a surviving spouse will inherit the property.
Community Property With Right of Survivorship
A decedent and their spouse who lived in a community property state may hold some property as community property with right of survivorship. A few states allow an individual to execute a community or marital property agreement with their spouse to designate some or all of their property as community property with right of survivorship. Surviving spouses automatically inherit community property with right of survivorship upon the decedent’s death, even if there is a conflicting will provision.
If spouses were going through a divorce at the time of death, an executor or beneficiary may wish to consult with a probate attorney to determine whether community property rules still apply.
Assets not specifically held as community property with right of survivorship may still be held as community property or considered community property under state law, even if they are owned in the name of just one spouse. Some states allow couples to execute a community or marital property agreement to declare some or all of their property community property. However, if the couple divorced, permanently separated, or rescinded the agreement, it may no longer be in effect. In certain states, like Alaska and Wisconsin, a community or marital property agreement may also name a beneficiary to inherit after the second spouse’s death.
Community property may be transferred more easily to a surviving spouse, but a decedent’s share of community property may be left to anyone. Therefore, community property without right of survivorship might not avoid probate. Only a few states, such as California and Texas, provide avenues for a spouse to transfer community property without right of survivorship outside probate. Other states provide simplified probate procedures for transferring community property without right of survivorship.
Community Property and Debt
Spouses who accept their deceased spouse’s share of community property also generally accept liability for their spouse’s debts. If a deceased spouse’s debts are substantial, a surviving spouse may want to probate the property anyway to secure an official deadline for creditor claims.