Legal Definitions - joint tenancy

Joint Tenancy is a legal arrangement where two or more individuals own property together, with each owner holding an equal and undivided interest in the entire property. The most distinctive feature of joint tenancy is the right of survivorship. This means that if one joint owner dies, their share of the property does not pass to their heirs or beneficiaries through a will or probate. Instead, the deceased owner's interest automatically and immediately transfers to the surviving joint owner(s), who then absorb that share and become the sole owner(s) of the entire property.

Here are some examples to illustrate how joint tenancy works:

• Example 1: Vacation Condo Ownership

  Imagine three siblings, Anna, Ben, and Chloe, decide to purchase a vacation condominium together. They title the property as joint tenants. Each sibling has an undivided one-third interest in the entire condo, meaning they all have the right to use and enjoy the whole property, not just a specific part. If Ben were to pass away unexpectedly, his one-third interest would not go to his children or other heirs. Instead, due to the right of survivorship, Ben's interest would automatically transfer to Anna and Chloe, who would then become the sole owners of the entire condominium.

• Example 2: Joint Bank Account

  A married couple, Sarah and Tom, open a joint savings account at their bank, specifying that it is held in joint tenancy. Both Sarah and Tom have full access to and an undivided interest in all the funds in the account. If Tom were to die, Sarah would automatically become the sole owner of all the money in that savings account. The funds would not be subject to Tom's will or go through the probate process; they would pass directly to Sarah by operation of the joint tenancy agreement.

• Example 3: Inherited Investment Portfolio

  Two college friends, Liam and Maya, inherit an investment portfolio from a generous mentor, with the condition that they hold it as joint tenants. They each have an equal and undivided interest in all the stocks, bonds, and other assets within the portfolio. If Maya were to pass away, her share of the investment portfolio would not be distributed to her family or beneficiaries. Instead, Liam would automatically become the sole owner of the entire investment portfolio, demonstrating the automatic transfer of ownership characteristic of joint tenancy.