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22 October, 2017

JOINT TENANTS WITH RIGHT OF SURVIVORSHIP

A joint tenancy or joint tenancy with right of survivorship (JTROS or JTWROS) is a type of concurrent estate in which co-owners have a right of survivorship, meaning that if one owner dies, that owner's interest in the property will pass to the surviving owner or owners by operation of law, and avoiding probate.  The deceased owner's interest in the property simply evaporates and cannot be inherited by his or her heirs.  Under this type of ownership, the last owner living owns all the property, and on his or her death the property will form part of their estate.  Unlike a tenancy in common, where co-owners may have unequal interests in a property, joint co-owners have an equal share in the property.

It is important to note, however, that creditors' claims against the deceased owner's estate may, under certain circumstances, be satisfied by the portion of ownership previously owned by the deceased, but now owned by the survivor or survivors.  In other words, the deceased's liabilities can sometimes remain attached to the property.

This form of ownership is common between husband and wife, and parent and child, and in any other situation where parties want ownership to pass immediately and automatically to the survivor. For bank and brokerage accounts held in this fashion, the acronym JTWROS is commonly appended to the account name as evidence of the owners' intent.

To create a joint tenancy, clear language indicating that intent must be used - eg. "to AB and CD as joint tenants with right of survivorship, and not as tenants in common".  This long form of wording may be especially appropriate in those jurisdictions which use the phrase "joint tenancy" as synonymous with a tenancy in common.  Shorter forms such as "to AB and CD as joint tenants" or "to AB and CD jointly" can be used in most jurisdictions.   Words to that effect may be used by the parties in the deed of conveyance or other instrument of transfer of title, or by a testator in a will, or in an inter vivos trust deed.

If a testator leaves property in a will to several beneficiaries "jointly" and one or more of those named beneficiaries dies before the will takes effect, then the survivors of those named beneficiaries will inherit the whole property on a joint tenancy basis.   But if these named beneficiaries had been bequeathed the property on a tenancy in common basis, but died before the will took effect, then those beneficiaries' heirs would in turn inherit their share immediately (the named beneficiary being deceased).

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