Joint Tenancy
Key Takeaway
- Joint tenancy is a legal arrangement where two or more persons own an asset with equal rights, and possess a right to survivorship with the surviving joint owners inheriting the deceased partner's share.
What is Joint Tenancy?
Joint tenancy is a legal arrangement where two or more persons or entities own an asset and have an equal share in the same is called a joint tenancy. This is an equal partnership where all the partners have equal rights over the property.
The owners in this kind of a structure have a ‘right to survivorship’ which means, if one of the owners dies, their share is passed on to all the other surviving joint owners equally. This implies that an owner’s share cannot be passed on to their heirs.
In a joint tenancy, partners cannot sell their share individually and the arrangement stays until all the joint owners agree to sell the property. This arrangement can save money and time spent on a probate-process when a partner dies. The most common example is a property bought by a husband and wife together, wherein if one dies, the other becomes the outright owner of the property.
An alternative to joint tenancy is tenancy in common, where partners can have uneven shares and can sell their shares individually without approval from other partners.