Joint ownership of property directly influences how assets transfer after an owner dies. Understanding the different types of joint ownership and their impact on probate helps property owners make informed estate planning decisions.
Types of joint ownership
Two main types of joint ownership determine how property transfers after an owner’s death: joint tenancy with right of survivorship and tenancy in common. In joint tenancy with right of survivorship, the surviving owner automatically inherits the deceased owner’s share, bypassing probate. In tenancy in common, each owner holds a separate interest in the property. When one owner dies, their share does not automatically transfer. Instead, probate determines the distribution based on the will or state law.
Avoiding probate with joint tenancy
Joint tenancy with right of survivorship allows property to transfer without court involvement. The surviving owner immediately gains full ownership, reducing legal fees and delays. However, adding a joint tenant requires careful consideration. This decision can create tax consequences or expose the property to the co-owner’s financial liabilities.
Challenges of tenancy in common
Tenancy in common requires probate to determine who inherits the deceased owner’s share under North Carolina law. If no will exists, North Carolina’s intestacy statutes control how the property is divided. This process can take months or even years, depending on the estate’s complexity. Co-owners may face disputes over selling or managing the property, potentially leading to court intervention and further probate delays.
Property owners should evaluate how they hold title to real estate. Joint tenancy simplifies the transfer process, but it does not suit everyone. Professional guidance helps individuals select a good ownership structure to ensure property transfers according to their wishes.