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Joint tenants with rights of survivorship

Joint tenants with rights of survivorship is a concept you need to understand. Bankrate explains.

What is joint tenants with rights of survivorship?

Joint tenants with rights of survivorship (JTWROS) describes a form of property ownership in which a co-owner is automatically granted ownership of an asset when a second co-ower dies. This is a form of concurrent estate or co-tenancy.

Deeper definition

There are many classes of assets that may be owned jointly by more than one person, such as real estate, bank accounts, and retirement accounts, to name only a few. Under JTWROS, in the event two people hold an asset and one passes away, the second person automatically becomes the full owner of the asset. This form of concurrent estate is distinct from cases when a second party is named as a beneficiary.

When two or more people purchase a home, each person is equally responsible for the mortgage and the deed is listed in both names. Other types of property that may be held as joint tenants with rights of survivorship include money market accounts, investment accounts, and checking or savings accounts.

Certain accounts are not eligible. For example, parents or grandparents who open custodial accounts for their children or grandchildren may find restrictions on granting title for the account. There are also restrictions by state. Alaska, Oregon, and Tennessee allow married persons to hold joint property as tenants in entirety. Wisconsin and Texas place restrictions on how jointly held property is titled.

Learn more about checking accounts on Bankrate’s account comparison page.

Example of joint tenants with rights of survivorship

A married couple that purchases a home may opt to own the home jointly. The real estate would be held as joint tenants with rights of survivorship, and the deed to the property would say “John and Mary Smith, JTWROS.” Alternatively, a parent may opt to transfer property into a joint account as a way of minimizing the potential of their child being responsible for an inheritance tax. In these cases, the bank account or real estate may be titled “Mary Madeline, John Crank, and Joe Crank, JTWROS.”

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