Ownership of property, especially real estate, often involves more than one person. In Georgia, you can own a property as either joint tenants or tenants in common. These arrangements may appear similar on the surface, but they have important distinctions that can significantly impact your estate planning.
What is Joint Tenancy?
Joint tenancy is a form of shared property ownership where each tenant owns an equal share of the property. The defining characteristic of joint tenancy is the right of survivorship. This means that if one tenant passes away, their interest in the property automatically passes to the surviving joint tenant(s). This transfer happens outside of probate, providing a smoother transition of the property.
However, joint tenancy might not be suitable for everyone. It requires the 'four unities'—interest, title, time, and possession—to be met, meaning all joint tenants must acquire the property at the same time, via the same deed, and each must have an equal share and the right to possess the whole property.
What is Tenancy in Common?
In contrast, tenancy in common allows co-owners to have different ownership interests, which can be acquired at different times. Unlike joint tenancy, there is no right of survivorship. When a tenant in common passes away, their share doesn't automatically go to the remaining tenants. Instead, it is passed according to their will, or if no will exists, according to Georgia's laws of intestate succession.
This can make tenancy in common a more flexible choice for estate planning. You're free to leave your share to anyone you choose, and it allows for mixed-use properties, such as business and personal, to be owned by the same individuals but in different proportions. But, in can also result in additional costs and time to transfer property ownership after the death of one owner, and that may not be appropriate in all situations, especially if a married couple owns the property and desires to leave it to their spouse who survives them.
Choosing Between Joint Tenancy and Tenancy in Common in Estate Planning
When deciding between joint tenancy and tenancy in common for estate planning purposes, it's important to consider the implications of each.
Joint tenancy provides a quick and easy transfer of property upon death but restricts your ability to pass the property to anyone other than the joint tenant (absent agreement of all owners). On the other hand, tenancy in common offers more flexibility in distributing property after death, but your loved ones will have to go through probate, which may result in increased costs and time delays.
In addition, these decisions may have tax implications, so it's crucial to consult with an estate planning attorney to fully understand these nuances and make the choice that best fits your situation.
Estate Planning with Peach State Wills & Trusts
At Peach State Wills & Trusts, we're here to guide you through these details, offering advice tailored to your specific circumstances. Choosing between joint tenancy and tenancy in common is just one aspect of estate planning.
Contact us at 678-344-5342 for help with estate planning in Georgia. You can also download our free guide here, no strings attached. Your peace of mind in estate planning is our priority.