Are you confused about joint tenancy and tenancy in common, and unsure which ownership option is best for you?
Let me break down the differences in plain language, including the advantages and disadvantages of each, so you can figure out which one fits your goals. I’ll tie it back to estate planning and what happens to your ownership interest when you pass away.
What Is Joint Tenancy?
Joint tenancy is a form of property ownership where two or more people, such as you and your spouse or you and a friend, each hold an equal share. Two owners means 50/50. Three owners means a third each.
The defining feature is the right of survivorship. When one joint tenant dies, their share automatically transfers to the surviving joint tenants. So if you and another person own a property as joint tenants and you pass away, the other person ends up owning 100 percent. With three owners, if one passes, the remaining two each hold 50 percent. This is what lets joint tenancy avoid probate.
A lot of people love owning title this way and will put their children on title so the house passes to them at death. I want to flag that putting someone on title as a joint tenant just so they inherit is actually very risky and dangerous. I have a separate video on why that’s a bad idea, and it’s worth watching before you do it.
What Is Tenancy in Common?
Tenancy in common also involves two or more owners, but unlike joint tenancy, there is no right of survivorship.
That difference matters enormously. If you own property as tenants in common and you pass away, your interest does not automatically go to the other owners. It doesn’t even go straight to your family. It passes according to your estate plan, or through your state’s probate rules if you have none.
Here’s why that leads to probate. With joint tenancy, the world just looks at the deed and sees who the surviving owner is. With tenancy in common, they don’t rely on the deed, even if there are multiple surviving owners. They look to your trust, or your will, and if you have neither, it goes to probate. Even a will goes to probate here.
So the safest move with tenancy in common is to put your interest into your trust. If you own 20 percent of a property, make sure that 20 percent goes into your trust. That way your family avoids probate and the people you want to receive your share actually get it.
Tenancy in common is also more flexible on percentages. You can own it unequally, such as 1 percent and 99 percent, or 30/30/40. Just remember there is no right of survivorship.
Be especially careful with a spouse. People assume that because they co-own with their spouse, the survivor automatically inherits. That’s not necessarily true. Unless you hold title as joint tenancy, or as community property with right of survivorship in a community property state, a surviving spouse who owns as tenants in common may have to go through probate to receive the deceased spouse’s share. How title is held determines whether there’s probate, and whether the co-owner receives it cleanly.
Advantages and Disadvantages of Joint Tenancy
Advantages
The right of survivorship is the big one. A deceased owner’s interest transfers automatically to the surviving joint tenants, bypassing probate and making for a seamless transition. That saves time, money, and complexity, which is why some people use joint tenancy in place of a living trust. As I mentioned, though, that often carries risks that outweigh the convenience.
Joint tenancy is also easy to change. Adding or removing a joint tenant can usually be done by executing a new deed, which is sometimes simpler than updating a trust.
But a warning for Californians: removing or adding a joint tenant can trigger a property tax reassessment. I get calls all the time from people whose parents put them on title, or who took someone off title, and then got a tax bill that doubled their annual property taxes. On an older property, taxes could jump from $3,000 a year to $6,000, $10,000, or $20,000 depending on current value. In California, talk to a lawyer before you do this. This mistake is huge.
Disadvantages
Joint tenancy means limited control. You share equal ownership and decision-making with the other joint tenants, so major decisions like selling or mortgaging generally require everyone’s consent. If owners disagree, that can lead to difficult standoffs, even litigation.
Conflicts can also arise when relationships sour or owners disagree about how the property is used, who lives there, or whether it’s rented. A joint tenancy agreement or a property management agreement between co-owners helps here.
Advantages and Disadvantages of Tenancy in Common
Advantages
Tenancy in common gives you individual control. Each owner holds a distinct, separate interest, so you have more autonomy over your share. You can sell, transfer, or mortgage your interest without needing the other owners’ consent. It also allows unequal shares, like 90/10.
Disadvantages
The main drawback is the lack of a right of survivorship. If you die, your interest does not automatically pass to the other owners, your spouse, or your children, and it can end up in probate. That’s why you should put your interest into a trust. And as with any co-ownership, disagreements over maintenance, use, and management can come up, so a written, legally binding agreement between co-owners is important.
Which Option Is Better for Avoiding Probate?
For avoiding probate alone, joint tenancy is generally better, because the surviving co-owners receive the deceased owner’s share automatically.
But that isn’t always what you want. I’ve seen two friends buy a property as joint tenants without knowing what it meant. When one dies, the other gets 100 percent. Was that the intention? Maybe not. Maybe that owner’s half should have gone to their family. So before choosing either option, you have to understand your intentions. If one of you dies, do the other owners get it, or not?
Both options are fine when used correctly. Tenancy in common suits some situations, joint tenancy suits others. It depends on your circumstances, so understand the differences and talk to an attorney about what fits.
And remember, avoiding probate shouldn’t be your only consideration. Control over the property, potential conflicts, and your individual situation all matter. Consider what happens if a co-owner divorces and their spouse suddenly wants a piece of the property. That can upend the whole arrangement, which is why planning ahead with co-ownership is so important.
Ready to Protect Your Property the Right Way?
If you own property as tenants in common or as joint tenants, and you’d rather move your interest into a living trust, I can show you how.
Take the free trust class. I teach you how to make a living trust and move your property interest into it the right way, so you can protect your house from probate with confidence and without mistakes. Register at freetrustclass.com.
Book a free phone consultation. If you would rather have it handled for you, talk with our team about a plan built around your family. Call us at (408) 412-1913 or visit treeoflife.legal.
Subscribe on YouTube. I post new videos every week on living trusts and how to do it yourself.
My goal is to help you keep more money in the family and give you the peace of mind you deserve.
Disclaimer: I am not your lawyer, and this article is not legal advice. It is information only. Reading it does not create an attorney-client relationship. If you have a legal question, please talk to a lawyer.
