| Mrs. Jones came to see me after the death of her | | | | Beware of Solutions That Create More Problems |
| husband because she wanted help on the distribution | | | | Next, she brought out three deeds to her residence. |
| of his property. She had gone to her bank to withdraw | | | | The first deed showed that she and her husband had |
| one of her CDs (certificates of deposit) in the name of | | | | owned the property as joint tenants with right of |
| both her and her husband. The bank officer stated, | | | | survivorship. It sounded good. |
| "Since your husband has died, we can't release these | | | | However, in 1981, they had transferred the property |
| funds to you without a court order." | | | | out of their names to a third party and then back into |
| Warning! Joint Tenancy May Not Mean Right of | | | | their names. (This is called a straw-man transfer and is |
| Survivorship | | | | often used to create a new or different type of |
| Although the account was in both their names, it didn't | | | | property ownership.) Unfortunately, they transferred |
| specify right of survivorship. That's the first problem | | | | the property back as community property. |
| with joint tenancy: The belief that the right of | | | | Mrs. Jones didn't remember much about the transfer. |
| survivorship exists just because both names are | | | | She only knew that, in 1981, she and her husband |
| present on the document; the ownership must actually | | | | became involved in an investment they thought might |
| indicate a right of survivorship. | | | | increase the size of their estate. To reduce capital |
| If you own real estate, you may be familiar with joint | | | | gains taxes on a future sale, their attorney had |
| tenancy property. Deeds for married couples show | | | | recommended they take their property out of joint |
| the owners as: "John Doe and Jane Doe, as husband | | | | tenancy and title it as community property. |
| and wife, as joint tenants with right of survivorship and | | | | The couple hadn't realized that community property |
| not as tenants in common and not as community | | | | doesn't avoid probate. The attorney should have |
| property." This means that in the event of the death of | | | | recommended they use a revocable living trust. |
| either person listed on the document, the property | | | | (Currently, a new method to hold title is available: |
| automatically passes to the survivor. No probate is | | | | community property with right of survivorship. But this |
| involved. | | | | wasn't available at the time.) |
| That's the upside to what's known as right of | | | | It's uncomfortable to tell a widow that her recently |
| survivorship. It eliminates probate on the death of the | | | | deceased husband's estate now owned half of her |
| first spouse. In those instances, in the event of the | | | | residence. We had to probate this estate to transfer |
| death of either spouse, it's better to own property in | | | | half of the residence to her, the only heir of the estate. |
| joint tenancy with right of survivorship than to have | | | | I was glad for Mrs. Jones that her case took the |
| that property become subject to a will and therefore | | | | shortest amount of time I'd experienced to complete a |
| pass through a probate process. | | | | probate: only five and a half months. Mrs. Jones came |
| Revocable Living Trusts Eliminate the Dilemmas | | | | back to see me after the probate process was |
| Listen closely; Revocable Living Trusts can remedy | | | | completed. She was determined that, upon her death, |
| problems that are inherent with joint tenancy of | | | | all her assets could be distributed to her children |
| property, right of survivorship, and community property. | | | | without having to go through probate. She wisely |
| Although some people use joint tenancy to avoid | | | | transferred all her assets to her own revocable living |
| probate, the problems associated with wills and the | | | | trust. |
| probate process can still catch up with them. However, | | | | Be Prudent and Review Your Documents |
| property in joint tenancy doesn't avoid probate in these | | | | Do you know how you hold title to your properties, |
| two events: a common disaster in which both parties | | | | CDs and bank accounts? Review your documents |
| are killed or after the death of the second spouse. In | | | | and then make an appointment with your estate |
| both cases, the assets must go through probate. Only | | | | planning attorney to re-title or best of all, create a |
| a revocable living trust bypasses the delays and costs | | | | revocable living trust. |
| of probate. | | | | |