Tenancy in Common vs Joint Tenancy
When speaking of joint accounts, these two categories usually come to mind: Tenancy in common and joint tenancy. Tenancy in common describes an arrangement where an asset is owned by two or more individuals together, but without the right of survivorship. What this means is the following: Let’s say you and your spouse have a 50-50 ownership of a property under common tenancy. If your spouse passes away, their share of the property (more specifically, the value of that share) doesn’t automatically go to you. Instead, the asset in question is considered to be part of the deceased’s estate, and will be settled and distributed according to estate settlement procedures. In this case, you don’t automatically have a right to your spouse’s share.
Joint tenancy, on the other hand, means that you and your spouse or partner both own an asset together. This means that if you and your spouse have joint tenancy, their share of the jointly held asset automatically passes to you once they die, and vice versa. This process is obviously quicker and simpler, often eliminating the need for probate.
Things get a bit trickier if you have joint tenancy on an account with your adult children. In that case, your share of the account may still be considered part of your estate unless it can be demonstrated that the account and its assets were a gift from you to your child.