Joint Property After Death Or Divorce
Below, our friends from Vayman & Teitelbaum, P.C. discuss what happens to joint property after a death or divorce.
Understanding Types Of Joint Ownership
Jointly owned property can make life simpler, until it doesn’t. Whether it’s a shared home, a bank account, or an investment property, the way assets are titled can significantly affect what happens in the event of a death or divorce. Understanding your legal rights and obligations when it comes to joint ownership can help prevent confusion, conflict, and even costly litigation down the line.
Before we talk about what happens after death or divorce, it’s important to understand the two main forms of joint ownership:
Joint Tenancy With Right Of Survivorship (JTWROS)
This is a common way for spouses to hold property. In this arrangement, both owners have equal rights to the property, and when one person passes away, their share automatically transfers to the surviving owner—no need for probate. However, while this sounds straightforward, it can complicate matters if the relationship between the owners becomes strained or ends in divorce.
Tenancy In Common
This form of ownership allows multiple people to hold property together, but with distinct shares (which don’t have to be equal). If one owner dies, their share passes to their heirs, not the other owner(s). This setup is more flexible for investment partners, family members, or anyone who wants to maintain separate control over their interest in the asset.
After Death: What Happens To Joint Property?
If a co-owner passes away, what happens next depends on the form of ownership.
Joint Tenancy
As mentioned, the property automatically passes to the surviving joint tenant. It does not go through probate and cannot be willed to someone else. This might be ideal for a spouse, but it could cause problems if the deceased intended for their share to go to children from a previous relationship or another heir.
Tenancy In Common
The deceased’s share becomes part of their estate. It may go through probate and be inherited according to their will or, if there is no will, through intestate succession laws. This can create a situation where the surviving owner ends up co-owning property with the deceased’s heirs, which may or may not be ideal.
To avoid disputes and unexpected outcomes, it’s crucial to regularly review property titles and ownership documents, especially as life circumstances change.
After Divorce: Who Gets What?
Dividing jointly owned property during a divorce can be one of the most challenging parts of the process. Here’s how ownership status plays into it:
Marital Vs. Separate Property
In most cases, property acquired during the marriage is considered marital property and subject to division, regardless of how it’s titled. Even if only one spouse’s name is on the deed, the property may still be divisible.
Joint Tenancy In Divorce
Many couples choose to sell the property and split the proceeds, or one spouse may buy out the other’s share. However, joint tenancy is usually severed in divorce, and the title will often be changed to tenancy in common until the property is sold or transferred.
Court-Ordered Division
If the couple can’t agree, the court will step in to divide property equitably, not necessarily equally. This means the judge considers several factors, including each spouse’s financial situation, contributions to the marriage, and future needs.
Proactive Planning Can Prevent Future Conflicts
Whether you’re entering into a joint ownership situation or preparing for a life transition like marriage, divorce, or loss, it’s important to consult with a legal professional.
Clarify Ownership Intentions Early
When acquiring property, be clear about how you want it titled and how it should be handled if circumstances change.
Review Legal Documents Regularly
Life events like divorce, remarriage, or the death of a co-owner should trigger a review of deeds, titles, and ownership agreements.
Use Agreements When Necessary
In some cases, a co-ownership agreement or prenuptial/postnuptial agreement can spell out what happens to shared property, helping to avoid disputes later.
Help Is Available
Joint ownership can be a great tool, but it comes with responsibilities. Whether you’re navigating the loss of a loved one or the end of a marriage, understanding how joint property is handled under the law gives you the power to protect your interests and plan ahead with clarity. If you’re unsure how your assets are titled or what that means for your future, it’s always wise to consult with a knowledgeable family lawyer.