Laws that govern the distribution of property upon the owner's death vary from state to state. If you are considering this form of ownership, than you will want to understand how Kentucky law handles joint tenancy with rights of survivorship as it applies to both real estate and other assets. This information is for informative purposes and should not be used as a substitute for professional legal advice.
Two kinds of joint ownership are accounted for in Kentucky law: tenants in common and joint tenants with rights of survivorship. Tenants in common own a property, but their shares in that property do not automatically transfer should one of the owners die. The deceased's share of the property can only be transferred through inheritance (like a will). In joint tenancy, the deceased's share is automatically transferred to the other owners.
Benefits of Joint Tenancy
The greatest advantage of joint tenancy with rights of survivorship is its simplicity. This kind of joint ownership can allow you to avoid probate in Kentucky, reduce estate planning issues and streamline the process. Joint tenancy can ensure that the correct person receives the property without expensive legal maneuvering.
Tax and Other Concerns
Joint tenancy is common for couples but also is used by people in other situations, for example, by parents to provide for their children after their death. This creates legal issues that should be considered and discussed with a qualified legal professional. In cases of parents making their children joint tenants, it can result in undesirable tax consequences in the form of capital gains and a certain loss of control over usage of the property. As the child is a part-owner in the land, all legal and contractual decisions such as mortgages must be made in agreement with the child.
Another legal concern that should be considered is the permanence of joint tenancy. Unlike a will, which can be altered, joint tenancy is not something which can be easily changed after the fact. For instance, regarding bank and other accounts, according to Kentucky law, "sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties to the account as against the estate of the decedent unless there is clear and convincing written evidence of a different intention at the time the account is created." Therefore, a will written after the creation of a joint account cannot revoke a joint tenancy.
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