Avoiding Probate With Joint Tenancy

Joint tenancy is a popular probate-avoidance device—it works well and doesn't cost a thing.

By , J.D. · UC Berkeley School of Law

Joint tenancy is unquestionably the most popular probate-avoidance device around. And why not? Property owned in joint tenancy automatically passes, without probate, to the surviving owner(s) when one owner dies. Setting up a joint tenancy is easy, and it doesn't cost a penny.

Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts, securities, or other valuable property together. There can be, however, some serious drawbacks (discussed below), especially if you own property by yourself and are thinking of making someone else a joint tenant just to avoid probate.

In many states, married couples (or registered domestic partners or civil union partners) often take title not in joint tenancy, but in "tenancy by the entirety" instead. Both avoid probate in exactly the same way. If you're interested in that option, read this section first for the general joint tenancy rules; then check the discussion of tenancy by the entirety.

Joint Tenancy at a Glance



  • It's easy to create.
  • It's easy for the survivor to transfer title to himself or herself after one owner dies.
  • It works for just about anything you own: cars, real estate, bank accounts, stocks, and more.
  • In some states, the survivor may not have to worry about creditors' claims. In those states, after one owner dies, joint tenancy property is subject only to claims for debts that are the joint responsibility of both joint tenants.
  • You can have two or more joint tenants.
  • The last surviving joint tenant must use another method to avoid probate at his or her death.
  • Probate is not avoided if both owners die simultaneously (a very unlikely event).
  • Share of each owner must be equal (except in Colorado, Connecticut, Ohio, or Vermont).
  • If you own property by yourself, adding a joint tenant requires making a gift of a half-interest in the property.

How Joint Tenancy Avoids Probate

When one joint owner (called a joint tenant, though it has nothing to do with renting) dies, the surviving owners automatically get the deceased owner's share of the joint tenancy property. This automatic transfer to the survivors is called the "right of survivorship." The property doesn't go through probate court—the survivor(s) need only shuffle some simple paperwork to get the property into their names.

The exact steps depend on the type of property, but generally all the new owner has to do is fill out a straightforward form and present it, with a death certificate, to the keeper of ownership records: a bank, state motor vehicles department, or county real estate records office.

EXAMPLE: Evelyn and her daughter Maya own a car together, registered in their names as joint tenants with right of survivorship. When Evelyn dies, her half-interest in the car will go to her daughter without probate. To get the car registered in her name alone, Maya will need only to fill out a simple form and file it with the state motor vehicles agency.

If you're a joint tenant, you cannot leave your share to anyone other than the surviving joint tenants. So even if your will specifically leaves your half-interest in a joint tenancy house to someone else, it has no effect. The surviving joint tenant will automatically own the property after your death.

But this rule is less ironclad than it may sound. In most circumstances, a joint tenant can easily, and unilaterally, break the joint tenancy at any time before death.

EXAMPLE: Eleanor and Sadie own a house together as joint tenants. Without telling Sadie, Eleanor signs a deed (and records it in the county land records office) transferring her half-interest from herself as a joint tenant to herself as a "tenant in common." (Tenancy in common is a form of co-ownership that does not include the right of survivorship.) This ends the joint tenancy, leaving Eleanor free to leave her half-interest in the property to someone else in her will.

You could also give your interest to someone else. If you do, the new owners will not be joint tenants; instead they will be "tenants in common." There is no right of survivorship with tenancy in common property.

EXAMPLE: Sean and Alice own a beach house, which they inherited from their parents, in joint tenancy. Sean gives his half-interest to his grown children, making them tenants in common with Alice. When Alice dies, her interest will not automatically go to Sean's children. Instead, it will pass under the terms of her will.

Limitations of Joint Tenancy

There are definite limits on the effectiveness of joint ownership as a probate-avoidance strategy.

Probate is not avoided when the last owner dies. The probate-avoidance part of joint tenancy works only at the death of the first co-owner. (Or, if there are three joint tenants, only at the death of the first two, and so on.) When the last co-owner dies, the property must go through probate before it goes to whomever inherits it, unless the last owner used a different probate-avoidance method, such as transferring the property to a living trust. By contrast, some other probate-avoidance devices, such as living trusts or payable-on-death accounts, let you name a beneficiary who will inherit free of probate when the second co-owner dies.

Probate is not avoided if both owners die simultaneously. In that very unlikely event, each owner's share of the property would pass under the terms of his or her will. If a joint tenant died without a valid will, the property would go to each owner's closest relatives under state law. Either way, probate would probably be necessary.

One owner's incapacity may hobble the others. If one joint owner became incapacitated and could not make decisions, the other owners' freedom to act would be restricted. This problem can be avoided if each joint owner signs a document called a "Durable Power of Attorney," giving someone authority to manage their affairs if they cannot, or if the property is transferred to a living trust.

Drawbacks of Adding a New Joint Tenant Just to Avoid Probate

Joint tenancy is usually a poor estate planning choice when an older person, seeking only to avoid probate, puts solely owned property into joint tenancy with someone else. Adding another owner this way creates several potential headaches.

You're giving away property. If you make someone else a joint tenant of property that you now own yourself, you give up half ownership of the property. The new owner could sell or mortgage his or her share—or lose it to creditors or in a divorce.

EXAMPLE: An Arizona woman added her adult son as an owner of her condominium as a joint tenant. The mother paid all expenses of the property and received all the income from renting it to tenants. Later, the IRS sued the son for unpaid income taxes, and eventually the condo was sold to pay the taxes. The mother received half of the proceeds. She sued for the other half, arguing that she was the only true owner because the joint tenancy had been created only for estate planning purposes. She lost. (Nikirk v. U.S., 2003 WL 22474742 (D. Ariz. 2003).)

Gift tax may be assessed on the transfer. If gifts to one person (except your spouse) in one year exceed the annual federal gift tax exclusion ($18,000 in 2024), you must file a gift tax return with the IRS. No tax is actually due, however, until you leave or give away a very large amount ($13.22 million in 2024) in taxable gifts.

There's one big exception: If two or more people own a bank account in joint tenancy, but one person puts all or most of the money in, no gift tax is assessed against that person. The theory is that because the contributor still has the power to withdraw the money, no gift has been made yet. A taxable gift may be made, however, when the other joint tenant withdraws money from it. (IRS Priv. Ltr. Rul. 94-27003, 1994.)

It may spawn disputes after your death. Many older people make the mistake of adding someone as a joint tenant to a bank account just for "convenience." They want someone to help them out by depositing checks and paying bills. But after the original owner dies, the co-owner may claim that he or she is entitled, as a surviving joint tenant, to keep the funds remaining in the account. In some instances, maybe that's what the deceased person really intended—it's too late to ask. Sadly, this sort of confusion often leads to bitter and permanent family rifts, some of which are fought out in court.

If you just want someone to write checks for you, consider opening a "convenience" account or giving a trusted person a "power of attorney." Either way will give someone you choose the authority to use money in your account, but only on your behalf.

A surviving spouse may miss an income tax break. If you make your spouse a joint tenant with you on property you own separately, the surviving spouse could miss out on a potentially big income tax break later, when the property is sold.

You need concern yourself with this problem only if:

  • you own property separately and want to make your spouse a joint tenant now instead of leaving the property to him or her at your death
  • the property's value has gone up (or you expect it to), and
  • you don't live in a community property state (community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin).

To understand the problem, you need to know a little about IRS "tax basis" rules. The tax basis on any item of property is the amount from which taxable profit is figured when property is sold. Usually, basis is what you paid for the property, with some adjustments. For example, if you buy an antique for $100, that amount is your basis. If, 20 years later, you sell it for $400, IRS rules let you subtract your $100 basis, leaving $300 in taxable profit.

If you own a piece of property by yourself and leave it to your spouse at your death, his or her tax basis is the market value of the property at the time it's inherited. If the value of the property has gone up, the basis goes up (it's "stepped up," in tax jargon), too. That's good, because a higher basis means lower taxable profit when the property is sold.

By contrast, if you transfer the solely owned property to joint tenancy with your spouse, the tax basis of the half you give stays exactly the same; it isn't stepped up. (26 U.S.C. § 2040.)

As noted above, there's a special rule for couples in community property states: Both halves of community property get a stepped-up basis when one spouse dies. This is true even if the community property is held in joint tenancy. But in that case, the surviving spouse must show the IRS that the joint tenancy property was in fact community property—that is, that it was bought with community property funds. If the title documents say joint tenancy, that's what the IRS will go by. You may be better off holding title as community property in the first place.

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