With joint tenancy, two people can share ownership of the same real estate, with equal ownership shares. While co-owners don’t need to be related, it is common for parents to use joint tenancy with their children.
The primary reason for this is to simplify the transfer of property after the parent passes away. Without joint tenancy, the property may have to go through probate, which can be a lengthy and costly process. However, with joint tenancy, if one property owner passes away, the other automatically assumes full ownership.
This arrangement can be particularly convenient if an adult child is already living in the home with their parents. It ensures that the child has a place to live and becomes the homeowner immediately when they need it most. It also helps to avoid disputes with other beneficiaries or siblings, as the property skips probate.
Does it create any complications?
Joint tenancy can lead to some complications, especially when it comes to selling the property. Since both individuals are equal owners, they must both agree to sell. If a parent enters a joint tenancy arrangement with their child but later decides they want to sell the home, they would need the child’s approval. Without it, the sale could be delayed or even derailed, potentially requiring further legal action. This makes it essential for everyone involved to share the same goals and be on the same page from the very beginning.
This is just one example of how real estate transactions can become complicated, but it highlights the importance of understanding all legal options and taking the correct steps both before and during a transfer or sale.