Jointly Owned Property And Probate

There are two types of probate, living probate and probate at death.  Joint tenancy, a common form of jointly owned property, doesn’t avoid either type of probate.

Living Probate

Living probate is called “conservatorship” in California; it occurs when someone becomes disabled (i.e. incapacitated) and can’t manage his or her own finances.  The court holds a hearing and determines whether the individual is indeed disabled; if so, all assets, including jointly owned assets, are frozen.  The court appoints a conservator (who may or may not be a family member) and supervises the conservator until capacity returns or the individual dies.

Jointly tenancy property, even property owned jointly with a spouse, does not avoid living probate.  In fact, both spouses lose control.

Death Probate

Jointly tenancy property avoids probate only at the first death.  For example, if Jack and Grace own their house as joint tenants with right of survivorship and Jack dies, probate is avoided as the house passes by operation of law to Grace.  However, when Grace dies the house typically goes through probate. However, even though title will pass automatically to the surviving joint tenant on the death of the other joint tenant, there can be significant negative income tax consequences to using joint tenancy as the method to transfer ownership at death.

Both living and death probate in California is to be avoided because it is highly expensive, time consuming, and a hassle.  In addition, probate is a public process which means that anyone can hear testimony as to why you are disabled and this can be stressful and embarrassing for you and your loved ones.  During death probate, there are required public filings that list your assets, debts, beneficiaries, and executors.  This invades your privacy and may subject your loved ones to hassle by people trying to get a quick buck.

Joint tenancy property does not avoid probate.  Consider, instead, using a fully funded revocable living trust to avoid both living and death probate.  Consult with a qualified and experienced estate planning attorney to determine the best plan for you and your loved ones.

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Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.

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