Buying a home is a major milestone, and it often comes with important legal decisions—especially if you're purchasing property with someone other than your spouse. Whether you're entering into a shared investment with a friend, buying with a partner, or co-owning with a sibling, the form of ownership you choose has long-term consequences. One of the most common—and commonly misunderstood—structures is joint tenancy.
While joint tenancy offers a straightforward way to share ownership, it isn’t always the best choice for non-spouse co-owners. Understanding how joint tenancy works, and how it compares to other ownership types, is an essential step toward making informed decisions. A careful review with a qualified estate planning attorney can help you determine what structure aligns best with your goals.
Joint tenancy is a legal arrangement where two or more individuals own equal shares of a property. One of the defining features of joint tenancy is the right of survivorship. This means that when one owner passes away, their share automatically transfers to the surviving owner(s) without going through probate.
This structure can simplify matters, especially when quick access to the property is a priority. But joint tenancy also has limitations. The right of survivorship overrides any instructions in your will or trust. If you intended for your share of the property to pass to a child, sibling, or other relative, joint tenancy could make that plan unenforceable. Once recorded, this ownership structure bypasses your broader estate plan.
Joint tenancy also requires that all co-owners act in unison. If one person wants to sell or refinance the property, all owners must typically agree. That lack of flexibility can lead to disagreements, especially if one co-owner experiences financial hardship or wants to change plans.
When you're co-owning property with someone who isn’t your legal spouse, joint tenancy creates shared responsibilities that may become complicated. One major issue is creditor exposure. If your co-owner becomes the subject of a lawsuit, divorce proceeding, or debt collection, their interest in the property may be targeted—and that could affect your shared ownership.
Additionally, you lose the ability to designate a different heir for your share of the property. If you pass away first, your co-owner becomes the sole property owner, regardless of your other intentions. That outcome may be fine in close relationships, but for many buyers, especially in blended families or business situations, it raises concerns.
Even daily decisions can be tricky. Suppose one party wants to sell their share while the other wants to hold the property long-term. Or, one co-owner moves away or stops contributing financially. Without proper planning or a co-ownership agreement, resolving those conflicts can be costly and time-consuming.
Joint tenancy isn’t the only way to hold property. In fact, tenancy in common may offer more control and better alignment with your estate planning goals. Under this structure, each person owns a specific percentage of the property and can transfer their interest through a will or trust. That allows you to leave your share to family or a chosen beneficiary while still co-owning with someone else.
Another alternative is creating a real estate partnership agreement or forming a limited liability company (LLC) to own the property. These methods are especially useful for business-related or investment properties. They provide clarity on how decisions are made, how profits are distributed, and what happens if one owner wants to exit.
These structures can be tailored to your specific situation and risk tolerance. They also offer protection against personal liabilities and can simplify the transfer of ownership if one party passes away. An estate planning attorney can explain how these alternatives compare to joint tenancy in both legal and tax terms.
Your choice of property title should always support your broader estate plan. For example, if your estate plan leaves your assets to specific heirs but you hold real estate in joint tenancy, those plans might conflict. The surviving joint tenant would automatically receive the property, leaving your heirs with no claim.
Joint tenancy can also lead to unintended tax outcomes. When one joint tenant dies, the surviving owner may receive a step-up in basis for only half of the property's value—which could lead to higher capital gains taxes if the property is sold. Other structures may allow a full step-up in basis or defer taxes more effectively.
Coordinating your real estate ownership with your estate plan ensures that your wishes are honored and your beneficiaries are protected. A Nevada estate planning attorney can help you evaluate whether joint tenancy supports or hinders your estate goals and suggest alternatives that work in harmony with your overall strategy.
Co-owning property with a non-spouse involves more than just deciding whose name goes on the deed. Legal ownership structures influence your rights, your risks, and your legacy. Whether you're investing in a property with a sibling, buying a home with a long-term partner, or collaborating with a business associate, choosing the right structure is essential.
Joint tenancy may be appropriate in certain cases, but it requires clear understanding and agreement between all parties. You also need to consider how your real estate decisions intersect with your estate planning documents. Taking the time now to choose wisely can prevent legal complications and financial losses later.
If you're in the process of buying property with someone other than a spouse, set aside time to speak with a trusted attorney. Anderson, Dorn & Rader helps Nevada residents navigate real estate ownership and estate planning issues with clarity and care. Our team can walk you through the pros and cons of joint tenancy, explain how it aligns (or conflicts) with your estate plan, and guide you toward the right decision for your circumstances.
The ownership decision you make today will have lasting effects. Make sure it's built on a foundation of knowledge and legal insight.
Many newlyweds assume estate planning is something to think about later in life or after starting a family. However, without a proper estate plan, Nevada state law will determine how assets are distributed, which may not align with a couple’s wishes. Estate planning ensures financial security, protects assets, and prevents unnecessary legal complications.
For those who believe joint ownership or a prenuptial agreement is sufficient, it’s important to understand that estate planning goes beyond these arrangements. This article explores common myths and frequently asked questions about estate planning for newlyweds and explains why having a well-structured plan is essential.
A common misconception is that jointly owning all assets means an estate plan is unnecessary because the surviving spouse automatically inherits everything. While joint ownership can ensure a seamless transfer in many cases, there are significant risks to consider:
A comprehensive estate plan ensures that assets are protected, properly distributed, and managed in the event of incapacity.
A prenuptial agreement is designed to clarify asset distribution in case of divorce or death, but it does not address all essential estate planning concerns. Couples relying solely on a prenup may face unexpected legal challenges.
A well-structured estate plan provides security beyond what a prenuptial agreement offers by ensuring financial and medical decisions are properly managed.
Even without children, newlyweds need to consider how their assets will be handled in case of incapacity or death. Many assume their spouse will automatically inherit everything, but this is not always the case.
Creating a Nevada estate plan early in marriage helps avoid complications and ensures assets are managed according to the couple’s wishes.
Some newlyweds hesitate to start estate planning if they anticipate moving in the near future. However, delaying estate planning can leave a couple unprotected in an emergency.
Newlyweds should take proactive steps now to establish estate planning protections rather than waiting until after a move.
Estate planning is a crucial step for newlyweds looking to protect their assets, ensure financial security, and avoid legal complications. A well-structured estate plan provides protections that joint ownership and prenuptial agreements alone cannot offer.
Couples ready to take control of their financial future should schedule a consultation with Anderson, Dorn & Rader Ltd.. Their team of experienced Nevada estate planning attorneys can help create a customized plan tailored to each couple’s unique needs.
There are DIY legal document sites on the Internet that sell generic fill-in-the-blanks legal documents including last wills. Another type of do-it-yourself estate planning involves the use of joint ownership. It is possible to add a co-account holder to your brokerage and/or bank accounts. If you do this the co-owner would be the only owner of the assets in these accounts at the time of your passing. You could instruct this individual to distribute this remainder to other people of your choosing. Voilà, you have an estate plan in place (or so the story goes).
There are difficulties with this strategy of joint ownership. Clearly you are going to choose a joint owner that you think you can trust. Be that as it may, you have no guarantees regarding what this person does with the money after you pass away. He or she may not agree with your inheritance ideas. As a result individuals that you care about may ultimately be disinherited. There is also the matter of creditors. If your co-owner was to accrue debt his or her creditors could seek to attach or lien property that is held jointly. The same is true of anyone who may be suing the co-owner for one reason or another. In the case of divorce a departing spouse could target these funds as well. Then there is the issue of a loss of the full step up in basis of appreciated assets.
Joint ownership is not a truly viable alternative to a properly constructed estate plan. Discuss these matters with a qualified estate planning attorney to be sure that your wishes become a reality after you pass away.
