Define Survivorship, Right of in Real Estate

"A Deep Dive for Real Estate Agents"

A few more aspects of the right of survivorship that you should be aware of:

Types of Ownership: The right of survivorship typically applies to joint tenancy and tenancy by the entirety. In joint tenancy, two or more people own equal shares of the property, while tenancy by the entirety applies to married couples or registered domestic partners. In contrast, tenants in common, another form of co-ownership, do not have the right of survivorship; their shares can be passed on to heirs or beneficiaries through a will or other legal means.

Severance: The right of survivorship can be severed or ended in certain situations. For instance, if one of the joint tenants sells or transfers their share to a third party, the joint tenancy turns into a tenancy in common, and the right of survivorship no longer applies.

Benefits: The right of survivorship simplifies the transfer of ownership when a co-owner passes away. It bypasses probate, a legal process that can be time-consuming and costly. This can provide peace of mind and financial security for the surviving owners.

Tax implications: When a property is transferred through the right of survivorship, there may be tax implications for the surviving owners. They may be responsible for paying capital gains tax if the property has increased in value since it was first acquired. Additionally, the right of survivorship can affect estate taxes, so it's essential to consult a tax professional to understand the potential tax consequences.

In summary, understanding the right of survivorship is important for anyone involved in joint property ownership. Be aware of the different types of co-ownership, the situations in which the right of survivorship can be severed, the benefits it provides, and its potential tax implications. This knowledge will help you navigate property transactions and advise your clients effectively.