Joint Tenancy Comes With Advantages and Disadvantages
by Frank Rodriguez

Joint tenancy is a way for people to co-own property. It's a method often used by business partners or people who may not be related, although spouses can use it as well.

Joint tenancy conveys to each co-owner equal rights to the property's title, its use in time, its physical possession and interest in its financial proceeds. This form of co-ownership means that each joint tenant must work with the other tenants regarding any use or disposition of the property.

Often the key to a successful joint tenancy is what's known as the right of survivorship. This legal doctrine provides that surviving co-owners automatically gain the property interests of another joint tenant if he or she dies.

Joint Tenancy with Right of Survivorship plays a crucial role in business partnerships. Under a JTWROS, a corporation or commercial firm can keep going should one of the owners die. That's because the other partners hold Joint Tenancy in the business' real property, brokerage accounts, bank accounts and/or personal property (the firm's furniture, equipment, and so on).

Joint Tenancy also helps assure continuity by sidestepping probate. This is the process through which a special court evaluates a person's will to make sure that the document is legally valid and that the dispositions it contains are binding. For instance, a partner might bequeath his or her share in a business to a child or children, but a Joint Tenancy with right of survivorship would supersede that bequest. Probate can take months, sometimes even years, to complete because it considers this kind of legal entanglement.

Joint Tenancy with right of survivorship, on the other hand, takes effective immediately. Surviving joint tenants can continue to use the property in question, and can dispose of it as they see fit. There are other choices like tenancy in common that have their advantages and disadvantages as well.

However, co-owners under a Joint Tenancy agreement also have significant responsibilities. Joint tenants may not offer the property as collateral for a loan without the approval of the other tenants. Nor may one co-owner encumber the property with debt without taking on that debt for himself or herself as well.

Finally, Joint Tenancy only works well when the co-owners have a stable interpersonal relationship. Should siblings in a Joint Tenancy fall out, or business partners split up, no one can use or dispose of the property unable they mend their fences.

Frank Rodriguez may be contacted at