How Joint Ownership of Property Can Simplify or Avoid Probate
Probate is a judicial process by which property that was owned by a decedent is managed and distributed according to terms of the decedent’s last and will and testament or the state intestacy statute. Probate can be lengthy, expensive and subject to pitfalls. However, some assets may be exempt from probate, including those jointly owned with other people. When one owner of the property dies, the property may automatically pass to the other owners by operation of law. Real estate and other high value items such as bank accounts, securities, investment accounts, retirement accounts and automobiles can be titled as jointly owned and transferable upon death.
There are two types of ownership structures that can transfer property this way. One is a joint tenancy with right of survivorship. This property interest is available to any co-owners, whether or not they are related. In contrast to a tenancy in common, where each party owns a percentage of the property, joint tenants are deemed to have an interest in the entire property. That means that when one of them dies, the surviving tenants remain entitled to the full property value.
Property can also be held by a married couple with a right of survivorship. Arizona is a community property state, which means that most property acquired by the spouses during the marriage is considered jointly owned.
Since property held as joint tenancy or community property with a right of survivorship is not included in the deceased’s estate, these assets will not require probate. Exclusion of that property could qualify the estate for the small-estate affidavit procedure, which features minimal court supervision and has fewer requirements than the formal probate process. The value of a small estate cannot exceed $75,000.00 for personal possessions and $100,000.00 for real property. The exemption of high-value jointly held property may bring the estate well within these limits.
To learn more about how Jeffrey P. Hall, PLLC, can assist you with estate planning or probate issues in the Phoenix metropolitan area, call us at 480-409-5174 or contact us online for a free consultation.