To Avoid Probate, Check the Wording of Your Deed
Phrases and terms included in deeds can have serious effects, including possibly something you never intended. To make sure a property is smoothly transferred to the surviving spouse when one of two people whose names are on a deed dies, the language on the document should include some variation of "joint tenants with right of survivorship."
That phrase is enough in most states to avoid having to go to probate court to settle title of the home when one co-owner dies. In some states, additional language is included to ensure the two owners' intentions are clear. For example, in South Carolina, the phrase "as joint tenants with rights of survivorship, and not as tenants in common" is used.
Tenants in Common vs. Joint Tenants
Joint tenants each own half of a property. Tenants in common can own unequal shares of a property. There can also be many tenants in common, whereas joint tenants are usually a married couple.
After one of the tenants in common dies, their share of the property goes to their heir or heirs, as outlined in their last will and testament. There is no automatic inheritance for the surviving owner or owners as there is with joint tenancy.
A joint tenant arrangement is beneficial because it may not be contested by other relatives of the deceased. To take over ownership of the property, in most states the survivor typically must file a death certificate with the office that handles property records in the county in which the property is located. The survivor may also have to file an affidavit declaring themselves to be the surviving joint tenant.
Tenancy by the Entirety vs. Joint Tenants
In 24 states—Alaska, Arkansas, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming—as well as the District of Columbia, another form of property ownership is available to married couples: tenancy by the entirety. Property owned in this manner is considered wholly owned by both spouses, and as with joint tenancy, ownership easily transfers to a surviving husband or wife after the death of their spouse.
Because both spouses wholly own the property together, creditors can not attempt to seize it if they are owed money by only one of the owners. However, if both owners owe money to the same creditor, the house is not protected.
The "entirety" nature of this form of ownership also means neither of the owners can break the tenancy without the other owner's legal permission. A joint tenancy can be legally broken by either of the tenants without the other tenant's approval.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin have community property laws that consider everything a couple purchases after marriage to be equally owned by the spouses. Assets purchased prior to the marriage or after a legal separation are considered to be separate property.
In some of those states, including California, real estate purchased by spouses automatically transfers to the surviving spouse if language containing "with right of survivorship" or similar wording is included in the deed. In other states, including Louisiana, joint tenancy with rights of survivorship is not a legal option. Tenancy by the entirety is also not allowed in any of the community property states.
Seeking Legal Advice
You should consider consulting a property law attorney if you are unsure which ownership structures are permissible in your state or which type of property ownership you should choose. In many cases, however, joint tenancy with right of survivorship is the best option.