Joint tenancy is a popular way to avoid probate. It certainly has the virtue of simplicity. To create a joint tenancy, all you need to do is put the right words on the title document, such as a deed to real estate, a car's title slip, or the signature card establishing a bank account.

The General Rule

In the great majority of states, if you and the other owners call yourselves "joint tenants with the right of survivorship," or put the abbreviation "JT WROS" after your names on the title document, you create a joint tenancy.

A car salesman or bank staffer may assure you that other words are enough. For example, connecting the names of the owners with the word "or," not "and," does create a joint tenancy, in some circumstances, in some states. But it's always better to unambiguously spell out what you want: joint tenancy with right of survivorship.

EXAMPLE: When Ken and his wife, Janelle, buy a house, they want to take title in joint tenancy. When the deed that transfers the house to them is prepared, all they need to do is tell the title company to identify them on it this way: "Kenneth J. Hartman and Janelle M. Grubcek as joint tenants with right of survivorship." There should be no extra cost or paperwork.

Joint tenancy—or a form of ownership that achieves the same probate-avoiding rresult—is available in all states, although a few impose restrictions, summarized below. Remember that one rule applies in every state except Colorado, Connecticut, Ohio, and Vermont: All joint tenants must own equal shares of the property. If you want a different arrangement, such as 60-40 ownership, joint tenancy is not for you.

Learn more about tenancy by the entirety.

Special State Requirements

Especially when it comes to real estate, all law is local, so be sure you know your state’s rules on what language is required to create a joint tenancy with the right of survivorship. If you’re not sure, talk to a local real estate lawyer. Here are just a few special state rules.

Michigan. Michigan has two forms of joint tenancy. A traditional joint tenancy is formed when property is transferred to two or more persons using the language "as joint tenants and not as tenants in common." Any owner may terminate the joint tenancy unilaterally.

If, however, property is transferred to the new owners using the language "as joint tenants with right of survivorship" or to the new owners "and the survivor of them," the result is different. No owner can destroy this joint tenancy unilaterally. Even if you transfer your interest to someone else, that person takes it subject to the rights of your original co-owner. So if you were to die before your original co-owner, that co-owner would automatically own the whole property.

EXAMPLE: Alice and Ben own land in Michigan as "joint tenants with full right of survivorship." Alice sells her interest to Catherine and dies a few years later, while Ben is still alive. Ben now owns the whole property; Catherine owns nothing.

Oregon. Oregon doesn’t use the term “joint tenancy”; instead, you create a survivorship estate. The result is the same as with a joint tenancy: when one owner dies, the surviving owner owns the whole property. But technically, creating a survivorship estate creates what the lawyers call “a tenancy in common in the life estate with cross-contingent remainders in the fee simple.” (That clears it up, doesn’t it?)

South Carolina. To hold real estate in joint tenancy, the deed should use the words "as joint tenants with rights of survivorship, and not as tenants in common," just to make it crystal clear. (S.C. Code Ann. § 27-7-40.)

Texas. If you want to set up a joint tenancy in Texas, you and the other joint tenants must sign a written agreement. For example, if you want to create a joint tenancy bank account, so that the survivor will get all the funds, specifying your arrangement on the bank's signature card may not be enough. Fortunately, a bank or real estate office should be able to give you a fill-in-the-blanks form.

Take this requirement seriously. A dispute over such an account ended up in the Texas Supreme Court. Two sisters had set up an account together, using a signature card that allowed the survivor to withdraw the funds. But when one sister died, and the other withdrew the funds, the estate of the deceased sister sued—and won the funds—because the signature card’s language didn’t satisfy the requirements of the Texas statute. (Stauffer v. Henderson, 801 S.W.2d 858 (Tex. 1991).) More recently, the Texas Supreme Court ruled that a married couple who owned investment accounts labeled "JT TEN" did have survivorship rights, even though they hadn't signed anything stating whether or not the account had a survivorship feature. Holmes v. Beatty, 290 S.W.3d 852 (Tex. 2009). But it's still better to be explicit about your intentions.