Ask a Lawyer : Chapter 5 - Joint Tenancy

Ending a Joint Tenancy

Q. We belatedly realized that holding our house in joint tenancy wasn’t a good idea. How can we get it out of joint tenancy?

A. Your attorney can easily prepare a deed in which the joint tenancy owners convey the property to themselves as tenants in common. Most states exempt this type of deed from transfer taxes and it should not be subject to the federal gift tax. Before you do this, however, make sure that this transfer not prohibited by the terms of your mortgage and that it will not invalidate your title insurance policy. Your attorney can advise you on this. Answer by Harold Pskowski, BNA Tax Management, Washington DC

Alternatives to Joint Tenancy

Q. All things considered, what’s the best alternative to joint tenancy?

A. In many cases, the use of a revocable living trust will be the best alternative. If properly set up, a living trust will ensure that a trusted individual will be available to manage your property when you become disabled, without giving up any of the tax benefits associated with your sole ownership of the property. As an added benefit, any property in the trust will avoid probate.