What is Joint Tenancy?
Property ownership can be owned in different ways. This article will cover on type of ownership, joint tenancy. When there are two or more owners, and each of those owners owns an undivided share in the same interest, it is called joint tenancy. For example, if Sally, Joe, Bob, and Jane each separately owned 25% of the same piece of property, and the survivors of them take the 25% share upon the death of one owner, it would be considered joint tenancy in Colorado. Why does this matter? The ways joint tenancy property passes through probate or is held by Medicaid recipients can be an advantage. In probate, a surviving owner (joint tenant) may not have to file anything related to the property with the probate court. How can this be possible? The law states that the real property will pass to the surviving joint tenant(s) at the death of a joint tenant. However, a death certificate will still need to be filed with the Clerk and Recorders office. If one of the owners is a Medicaid recipient, the property may not become part of the decedent’s probate estate. This would mean that the Colorado Department of Health Care Policy and Financing could not take the property in a recovery claim. (Read more about Medicaid here). This all sounds great, what is the catch? If one of the joint tenants has creditors or other liabilities, the property is subject to those liabilities (i.e. civil law suits). Unless the joint tenants are married, titling or transferring the property into joint tenancy may result in gift tax liability. Most importantly, make sure your estate plan coincides with the law as it pertains to the property held in joint tenancy. Failing to properly title property, or having conflicting instructions in your Will or Trust, could end in a loved one unintentionally being disinherited. The fine print. There are many benefits and disadvantages to joint tenancy. When you consult with an experienced estate planning attorney, they will take the time to explain your options based on your specific needs and circumstances. Schedule a free, one-hour, initial estate planning consultation with a knowledgeable estate planning attorney at Ambler Keenan Mitchell Johnson in Denver, Colorado.