Have you ever wondered what happens to property when one of the owners passes away? If you’re in Texas and considering owning property with someone else, it’s essential to understand the concept of Joint Tenancy with Right of Survivorship (JTWROS). This arrangement offers unique advantages and considerations that you should know about.
What is Joint Tenancy with Right of Survivorship?
Joint Tenancy with Right of Survivorship, commonly abbreviated as JTWROS, is a way of owning property with one or more people in Texas. Here’s how it works: when you and another person own property as joint tenants, each of you owns the account in proportion to your contribution to the account. However, the key feature of JTWROS is that if one owner passes away, their share automatically transfers to the surviving owner(s). This type of ownership designation controls over any provision in a Will or Trust.
How Does it Work in Texas?
In Texas, JTWROS is recognized as a form of co-ownership. This means that when you buy property with someone else and specify that you want it to be held in joint tenancy, the ownership rights and responsibilities are governed by Texas law.
Benefits of Joint Tenancy with Right of Survivorship
Avoiding Probate: One significant advantage of JTWROS is that it allows the property to pass directly to the surviving owner(s) without going through probate. This can save time and money for your loved ones after your passing.
Clear Succession: With JTWROS, there’s no ambiguity about who inherits the property when one owner dies. The transfer of ownership is automatic and immediate.
Creditor Protection: In some cases, JTWROS may offer protection against creditors. If one owner faces financial difficulties, creditors generally cannot seize the property as long as it’s held in joint tenancy.
Considerations and Risks
Equal Ownership: Each owner in a joint tenancy holds a share of the property. This means that decisions regarding the property usually must be made jointly, and disagreements can arise.
Potential Tax Implications: While JTWROS can simplify the transfer of property, there may be tax implications to consider, especially regarding capital gains tax upon sale of the property.
Relationship Dynamics: Owning property with someone else, especially under JTWROS, requires a high level of trust and communication. It’s essential to consider the implications for your relationship with the co-owner(s).
Joint Tenancy with Right of Survivorship can be a valuable option for property ownership in Texas, offering benefits such as probate avoidance and clear succession. However, it’s crucial to weigh the advantages against the considerations and risks involved. Before entering into a joint tenancy arrangement, it’s wise to consult with a legal professional to ensure it aligns with your specific circumstances and goals.
Contact The Reecer Law Firm Today
At The Reecer Law Firm, we help families across Texas create estate plans that fits their specific needs. Whether you’re just getting started or updating your plan, we’re here to guide you. Dena Reecer, founder and owner of the Reecer Law Firm PLLC, is among a select group of Texas attorneys recognized as Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. Call us today at (940) 382-3168 or contact us for more information about how we can help you. Our office is located at 3105 Unicorn Lake Blvd., Denton, TX 76210.