Because estate planning is often perceived as a complicated process, Texans assume there are other options that are an acceptable substitute for an estate plan. One such example of this is joint tenancy. Joint tenancy is a legal arrangement in which two or more people own a property together with equal rights. However, joint tenancy on its own has major drawbacks that are often unexpected. Below are answers to common questions about the necessity of a Houston estate plan, and why a joint tenancy is not sufficient.
How Does Joint Tenancy Work?
Joint tenancy is property ownership between two or more parties. The parties come together to make a legally binding agreement through a deed, and the deed then will name the two owners as the joint tenants. While joint tenancy is most often utilized by couples—both married and unmarried—it can also be used by relatives, friends, or even just business associates. Because both parties have a claim to the property, they also share the benefits and downsides—be it mortgage payments, property taxes, or profits after sale. Besides a deed, joint tenancy can also apply to personal and business banking accounts, business assets like real estate, investment properties, and vehicles.