MYTH: Holding property in a joint tenancy arrangement is a cost effective way to avoid probate.
FACT: Holding property in a joint tenancy arrangement can avoid probate; however, there can be negative consequences to doing so. The joint tenant has ownership rights in the property leaving the property subject to the joint tenants creditors. For example, a house put in a joint tenancy arrangement where the joint tenants are a parent and a child can be subject to the child’s creditors. In addition, estate plans can be revoked or changed, but property in a joint tenancy arrangement is not revocable without the cooperation of both parties. If you have a disagreement with the joint tenant, you cannot simply take the property back. Lastly, some joint tenant arrangements involving gifts may have tax consequences.