With over 50 years of legal experience, Robert G Fry Jr. knows a thing or two about practicing law. Still, Fry can’t help but get perplexed about certain legal policies and strategies that are often promoted one of which being the Joint Tenancy Right of Survivorship.
Fry understands the significance and the complexities of buying a house, particularly with a significant other. However, one thing that continually baffles the accomplished Tulsa divorce attorney and real estate owner is the Joint Tenancy Right of Survivorship most real-estate agents push new homeowners to sign.
“I would say nine out 10 real estate agents think signing a Joint Tenancy Right of Survivorship is the only way to go,” Robert G Fry Jr. said. “That could not be further from the truth.”
Fry, who a been named a has been selected by Best Lawyers® for inclusion in its annual The Best Lawyers in America® directory for 14 consecutive years and is also a Fellow of the American Academy of Matrimonial Lawyers and a past president of the Oklahoma Chapter, discusses some of the consequences and risks associated with Joint Tenancy Right of Survivorship.
Lack of Flexibility:
Joint tenancy can be inflexible, especially when circumstances change. Unlike other estate planning tools that allow for customization, JTWROS doesn’t provide much room for adjustments. If the co-owners experience a falling out, divorce, or other changes in their relationship, undoing or modifying the joint tenancy can be challenging, leading to legal disputes and financial headaches.
Creditor and Legal Issues:
Another often overlooked peril is the exposure to the debts and legal troubles of the co-owners. In a joint tenancy, each party’s interest is vulnerable to the other’s liabilities. If one co-owner faces financial difficulties or a legal judgment, the jointly owned property could be at risk, putting the financial security of the other owner in jeopardy.
Loss of Control:
Joint tenancy involves relinquishing a degree of control over the property. While this may not be an issue in harmonious relationships, disagreements can arise regarding property management, maintenance, or potential sales. Disputes over the use or disposition of the property may lead to costly legal battles, undermining the convenience that joint tenancy aims to provide.
Unintended Consequences of Joint Tenancy Right of Survivorship:
One of the primary perils of JTWROS lies in its potential for unintended consequences. Individuals may enter into joint tenancy without fully understanding how it interacts with their overall estate plan. Inadvertently disinheriting intended heirs or causing family disputes over property distribution can occur when the survivorship feature is not thoroughly contemplated.
Robert G Fry Jr. expands on these unintended consequences, saying all too often property buyers are confused during the buying process and all too often given bad advice.
“Don’t let a bank, lender or real estate agent tell you to buy any real property taking title JTWROS because the loan or deed should be in both names,” Fry said. “That is false. Only the mortgage needs to be in both names not the deed or note depending on the circumstances.”
While joint tenancy with right of survivorship can be a straightforward way to transfer property, Robert G Fry Jr. says individuals must be aware of its potential pitfalls. Thorough estate planning, including consultation with legal and financial professionals, is essential to mitigate the risks associated with joint tenancy. By carefully considering the long-term implications, individuals can make informed decisions that align with their broader estate planning goals.
If you or someone you know has questions about Joint Tenancy Right of Survivorship Contact Fry & Elder today to set up a personal consultation with an experienced attorney.