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.
Real property is often one of the most significant assets a person owns. Ensuring a smooth transfer of this property to loved ones upon death while avoiding Nevada probate court involvement requires careful estate planning. Probate can be a lengthy and costly process, prompting many homeowners to explore alternative legal strategies.
Fortunately, Nevada law provides several ways to transfer real estate without subjecting it to probate, including living trusts, transfer-on-death (TOD) deeds, and joint tenancy arrangements. Understanding these options is essential to creating an estate plan that aligns with your goals.
A living trust is one of the most effective ways to avoid probate while maintaining control over real estate. Property placed in a trust is legally owned by the trust itself, meaning it does not need to go through probate upon the original owner’s death. Instead, a designated successor trustee manages the distribution of assets according to the trust’s terms.
While living trusts offer many advantages, they require proper management. The property must be formally transferred into the trust, and trustees must understand their roles and responsibilities. Additionally, trusts may involve higher upfront costs than other probate-avoidance methods. Consulting with an estate planning attorney ensures that the trust is structured appropriately.
A transfer-on-death (TOD) deed allows a property owner to name a beneficiary who will inherit the property automatically upon their death. This method eliminates the need for probate, making it a popular option for estate planning in Nevada.
While TOD deeds simplify property transfers, they do not offer the same level of control as a trust. If multiple beneficiaries are named, disagreements may arise. Additionally, TOD deeds may not provide protection against creditors or ensure that the property is managed according to specific wishes.
Another method to bypass probate is joint tenancy with right of survivorship. When two or more individuals own a property as joint tenants, the surviving owner(s) automatically inherit the deceased’s share of the property without probate court involvement.
Each method of transferring real property in Nevada has distinct benefits and considerations. The most suitable option depends on individual circumstances, estate planning goals, and financial factors.
| Method | Avoids Probate? | Flexibility | Protection from Creditors? | Cost Considerations |
|---|---|---|---|---|
| Living Trust | Yes | High | High | Higher initial cost |
| TOD Deed | Yes | Moderate | Low | Low-cost option |
| Joint Tenancy | Yes | Low | Low | Low-cost option |
For those seeking comprehensive control over property transfers and estate planning, a living trust is often the best choice. However, TOD deeds and joint tenancy arrangements provide simpler, cost-effective solutions for those with straightforward estate planning needs.
Avoiding probate in Nevada requires strategic estate planning. Each option for transferring real property comes with unique considerations, and selecting the right one depends on individual goals and circumstances.
Consulting an experienced estate planning attorney ensures that real property transfers are legally sound, properly executed, and aligned with long-term intentions. Anderson, Dorn & Rader Ltd. in Reno provides expert guidance tailored to each client’s estate planning needs, offering solutions that protect assets and ensure a smooth transition for loved ones.
Contact Anderson, Dorn & Rader Ltd. today to schedule a consultation and create a customized estate plan that effectively transfers real property without Nevada probate court involvement.
Joint ownership in property can be created in one of three forms: with rights of survivorship, as community property, or as tenants in common. The type of ownership you have in certain property will determine how that property is transferred at your death.
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