Does Joint Tenancy Replace a Will?

This is a topic I frequently cover in my monthly estate planning presentations. Many people think that owning property in joint tenancy means they don’t have to create a will or estate plan. Why bother with a will when all the property is going to your joint tenancy partner anyway? In fact (some people may ask) why not do away with the need for a Will altogether and hold property in joint tenancy with my children? The answer to that question is that although joint tenancy does not avoid probate, it delays probate until the last tenant dies. It also carries with it a number of problems and is NOT a replacement for a well-executed will or estate plan.

One of the primary problems with owning property in joint tenancy with your children is that, in the words of Phil Craig in his article Joint Tenancy: How Not to Avoid Probate, “Joint tenancy sure is easy to create, but sure is hard to end.” As Craig illustrates in his article, owning property jointly with your children may seem harmless at first, but what happens if your child gets married or divorced, gets sued, or even joins a cult?

Beyond the essential question of ownership, joint tenancy as an estate planning method falls short in numerous other ways as well; owning property in joint tenancy with your children does not do anything to minimize your estate taxes—In some ways it may actually increase your taxes. Additionally, owning property in joint tenancy with more than one of your children prohibits the other owners from leaving their share of the property to their own heirs.

Finally, even as husband and wife, holding property in joint tenancy has its dangers. If one of you were to become incapacitated or mentally incompetent, the other would have to obtain a conservatorship from the court before being able to sell or take any other legal action with the property. Having the ability to sell or refinance quickly could become a necessity when medical bills are piling up.

There are ways to avoid making probate a necessity after your death, but joint tenancy—while it may be quick, inexpensive and somewhat easy to achieve—is actually a complicated and expensive solution to avoid probate. Take the time to create a quality estate plan. Your assets will be protected in the long run, and your heirs will thank you in the end.