NOT ALL FORMS OF JOINT OWNERSHIP ARE THE SAME.  MAKE SURE YOU UNDERSTAND THE DIFFERENCE.

There are three basic ways that property is typically titled: in an individual’s name alone, in joint names with one or more other parties, and by or through certain designated contractual rights. Whether or not a particular asset or piece of property that you own at the time of your death will have to pass through probate will often depend entirely upon how it's titled.

What the Heck is Joint Ownership?

Joint ownership basically comes in three forms: with rights of survivorship, as community property (only applicable to certain states), and as tenants in common.

Joint Tenancy With Rights of Survivorship or “JTWROS” for short, means that the asset in question is titled to 2 or more owners and is held in a manner where when one of the owners dies the  surviving owner or owners will then be the exclusive owners of the asset and the deceased owner’s heirs will have no interest in same. All that the surviving owners will need to do is record a new deed or show a death certificate to the bank to remove the deceased person’s name from the property or account. 

Tenancy by the Entirety or “TBE” for short, is a special form of joint tenancy with rights of survivorship that is recognized strictly between married couples and in certain states is sometimes referred to as Tenants by the Entireties.  Aside from avoiding probate, this type of ownership is important for asset protection planning in states where it's recognized.  In other words, a judgment is entered against only one of the spouses the property is protected entirely because the non-liable spouse can assert the protection that this form of titling offers.

Community property is a special type of joint ownership recognized between married couples in only nine states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.  In Alaska, married couples can elect to have some or all of their property treated as community property by stating so in a written contract.

What happens to community property when one spouse dies? This will depend on whether or not the couple made an estate plan. If there isn't an estate plan, then the intestacy laws of their state will dictate where the community will go. If there is an estate plan, then the terms of the estate plan will supercede state law and the community property will go exactly where the spouses want it to go.

Tenancy in Common or “TIC” for short, is a form of ownership where property is owned by two or more people and where each of them own either an equal or designated percentage interest in same.  The respective percentage ownership interest in the property don't have to be equal and can be determined by how much one or more of the owners actually contributed to the purchase of the property.

For example, if a piece of real estate costs $200,000 and owner A contributes $160,000 and owner B contributes just $40,000, then owner A will hold a 80% interest in the property as a Tenant in Common and owner B will hold just 20% interest in same as a Tenant in Common. When owner A later dies, his/her 80% interest will pass to either pursuant to their Last Will and Testament or Revocable Living Trust, or, if they have no estate plan, to their heirs at law. Owner B, however, won't be entitled to receive any part of A's 80% interest in the property unless owner B is also named as an heir in A's Last Will and Testament or Revocable Living Trust or is one of A's heirs at law). Furthermore, if A's 80% interest is titled in his/her individual name as a Tenant in Common and not titled in the name of his/her Revocable Living Trust at the time of their death, then A's 80% interest will also need to be probated.