Joint Tenancy

The information is specific to real estate and is based only on Illinois law. If the property in which you are interested is not in Illinois, we suggest you contact the local bar association where the property is located.

Joint tenancy is a legal device in which two or more persons hold title to property together. As joint tenants, they have a right to equal use and enjoyment of that property during their lives. Upon the death of a joint tenant, the deceased joint tenant's share will pass automatically to the other tenants who are still living, rather than to the heirs of the tenant who died. For example, if a parent and a child take title to certain property as joint tenants and the parent dies, the child takes full title, and usually no interest in the property will pass to the parent's other children or to others named in the parent's will.

Husband's and wives often decide to hold title to their home as joint tenants or tenants by entirety, which is available only to Husbands and Wives. Those who consider such a step should think carefully about several aspects of the decision:

First the joint tenancy must be properly created. To accomplish this, the deed to the home should say that the spouses take title, quote, "as joint tenants and not as tenants in common," unquote. If the deed does not say this, the husband and wife will hold the home as tenants in common rather than as joint tenants. This means that when one of them dies, his or her share in the property will not pass to the surviving tenant, but rather will pass as part of the deceased spouse's estate under his or her will or, if there is no will, under the rules of descent set forth in Illinois law. If a joint tenancy has been properly created, however, the share of the first spouse to die goes automatically to the other spouse. It is not governed by the will of the first spouse and does not pass through probate court.

If husband and wife wish to buy a home in joint tenancy, they should put wording to that effect in the contract they sign to buy the house, and be sure the deed to them contains the joint tenancy language previously mentioned. Then if either dies before they receive the title, there will be no doubt about their intention that the surviving spouse should receive the home. This may prevent an estranged child or a hostile relative from getting a share in the property upon the closing of the purchase.

A second factor to consider is how a joint tenancy can be dissolved while both tenants are living. A joint tenancy ends if either joint tenant conveys his interest to some other person, or if a creditor of one of the joint tenants sues him and acquires his interest. This is called severing the joint tenancy, and the new transferee and the other joint tenant thereafter hold title as tenants in common rather than as joint tenants. A husband and wife may avoid this result by electing to acquire title to their home as tenants by the entirety.

Finally, one must consider possible undesirable consequences of joint tenancy. For example, joint tenancy may cause state tax problems upon the deaths of one or both of the joint tenants, depending on the size of the deceased's estate. Of course, if the total estate of a joint tenants is small enough under federal tax rules, all property of the joint tenant may be exempt from estate taxes upon his or her death. Other undesirable or unexpected consequences may result. For example, when one person who individually owns real estate transfers it into joint tenancy with another person, he cannot withdraw or get back the joint tenant's share without the consent of the other tenant. It is important to consider these consequences before two or more persons decide to take title to property as joint tenants. Sometimes it may be preferable to take title as tenants in common or as a sole owner rather than as joint tenants.