If you ask an average person what he or she knows about probate, you’ll likely get one of two responses. First, people might have no idea what you’re talking about. Second, they might have some idea of what probate is, but they will know that it’s probably something best avoided.
While the second answer isn’t exactly correct, there are good reasons why creating an estate plan to avoid probate is a good idea. As part of this goal, some people believe they can use jointly owned property to help avoid probate. While that is true, jointly owned property is not the best way to avoid probate. Let’s look at why.
Different Property Ownership Types
Not all forms of jointly owned property will allow you to avoid probate. For example, if you own property as tenants in common or community property, each co-owner has the individual right to dispose of his or her ownership portion. If one of the co-owners should die, that ownership interest must be treated in the same way as other individual property and, in some cases, must pass through the probate process before a new owner can inherit it.
Other forms of property, such as joint tenancy with the right of survivorship, does allow for some limited probate avoidance. For example, a husband and wife who own a home as joint tenants do not have to have the property probated if one of the spouses should die. This type of property allows for the remaining co-owner to automatically become the sole owner after the death of the other spouse.
However, after that the remaining spouse no longer owns the property as a joint owner, and thus the property must pass through probate when the remaining spouse dies. This effectively means that joint ownership can allow you to delay probate, but it will not allow you to avoid it completely.
The best way to make intelligent decisions about the planning of your estate is to work with an experienced and qualified estate planning attorney.