Joint tenancy vs tenancy in common

Joint tenancy with right of survivorship (JTWROS) gives each owner an equal share and passes the property automatically to the survivor at death, with no probate. Tenancy in common allows unequal shares, and each owner can leave their share to heirs.

Section 01

The three common forms of co-ownership

  • Joint tenancy with right of survivorship: equal shares, automatic transfer to survivors
  • Tenancy in common: any split of shares, each share passes by will
  • Tenancy by the entirety: married couples only, adds creditor protection in many states
  • Community property: in nine states, marital property with a full step-up in basis at death
Section 02

Tax and creditor consequences

Adding an adult child as a joint tenant is a common shortcut that backfires: it can be a taxable gift, exposes the property to that child's creditors and divorce, and forfeits part of the step-up in cost basis at death.

A transfer-on-death deed, available in many states, achieves the probate-avoidance goal without giving away present ownership.

Section 03

FAQ

Can a joint tenant sell their share?

Key takeaway

Yes, and doing so severs the joint tenancy for that share, converting it into a tenancy in common. The survivorship right no longer applies to that portion.

What happens to a jointly owned house if one owner dies?

Under joint tenancy with right of survivorship, the surviving owners take the share automatically without probate. Under tenancy in common, the share passes under the deceased owner's will.

Is joint tenancy better than a trust?

It is simpler and cheaper but blunter. A trust controls timing, protects the step-up in basis and keeps the property out of a co-owner's creditor and divorce exposure.

What is tenancy by the entirety?

Key takeaway

A form of joint ownership limited to married couples in certain states. Neither spouse can transfer alone, and in many states creditors of one spouse cannot reach the property.

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