Pros and Cons of Joint Tenancy with Right of Survivorship

JTWROS gives owners an equal right to the asset, if one account holder dies.

Also known as JTWROS, this is used often by couples and business partners as a means of owning each other’s assets. There are some good reasons to do this, but there are also some drawbacks.

DeedUsed for bank accounts, real estate, personal property and even brokerage accounts, JTWROS gives owners an equal right to the asset, if one account holder dies. When that occurs, the other account owner, usually a business partner, spouse or a child, is immediately the owner of the money or property. There are advantages and disadvantages to this arrangement, as clarified in Investopedia’srecent article, “The Benefits And Pitfalls Of Joint Tenancy.”


Avoiding Probate. When an individual dies, his or her will is reviewed by a probate court. The court decides if the will is valid and legally binding and determines what liabilities and assets the deceased may have left. Any remaining assets after all debts are settled, are then distributed to heirs. If the individual dies without a will, the laws of intestacy apply. The probate process can take weeks, months, or even years, to sort through the deceased's estate. It will take even longer for beneficiaries to receive their inheritance. However, with JTWROS, ownership automatically transfers to the other spouse or business partner upon the death of the first partner. There’s no probate.

Equal Responsibility. When a married couple or two business partners own an asset that is titled JTRWOS, both individuals are responsible for that asset. They both enjoy its benefits and share in the liabilities equally. It also means that neither party can incur a debt on the asset, without indebting themselves.

Continuity. When someone dies, his or her assets are often frozen until the probate court determines whether the assets are encumbered, or until a determination is made about how to distribute them to heirs. This can be a problem for a surviving spouse who has outstanding debt or expenses.  However, by owning an asset as a joint tenant, the surviving spouse or business partner may use the property in any way he or she sees fit. The law also states that immediately upon the death of one tenant, ownership is transferred to the survivor.


Deteriorating Relations. Two people who own the entire asset together can be a disadvantage in an unstable relationship. Neither party can sell or encumber the asset, without the other party's consent.

Frozen Bank Accounts. If the deceased is heavily in debt, and the probate court is concerned that the surviving spouse or business partner may liquidate the funds to avoid paying the obligations, the court could freeze the account. An account may also be frozen, if there is a question as to whether the surviving spouse or business partner actually contributed to the account, or if the ownership was merely for convenience. In some cases, the asset may still be frozen upon the death of either partner or spouse.

Partner Asset Control. When the surviving spouse or business partner assumes control over the joint asset upon the death of the co-tenant, he or she may then sell it, or bequeath it to someone else: the deceased loses control over the ultimate disposition of the asset entirely.

Alternatives. There are other ways to structure joint ownership. One is “tenancy in common,” which lets each party own one half, or a determined percentage or fraction of ownership. Each person has the right to sell their share without the other party’s approval or consent and the portion of ownership can be passed to heirs.

However, the ownership of the asset does not automatically transfer to the surviving account owner, when the first owner dies. It passes according to the deceased person’s will.

Assets can be accessed by other owners, if one person becomes disabled or dies. They can also sell a portion of the asset, without obtaining permission from a probate court.

Speak with an estate planning attorney before placing assets in JTWROS or tenancy in common to ensure that your assets work with your overall estate plan.

Reference: Investopedia(March 20, 2018) “The Benefits And Pitfalls Of Joint Tenancy”

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