How to Deal with Probate in Joint Tenancy
When someone dies owning real estate with another person, one of the first things to examine is the deed. Family members may know two people “owned the house together,” but that doesn’t necessarily tell you how title was held. Joint tenancy, tenancy in common, community property, and other forms of ownership can produce very different results after an owner dies.
If the deed confirms that the property was held in joint tenancy, one of its most important features is the right of survivorship. In general, when one joint tenant dies, that person’s interest passes to the surviving joint tenant or tenants by operation of law rather than passing through the decedent’s probate estate. California courts identify jointly owned property with a right of survivorship as property that may transfer without formal probate.
That sounds simple, and sometimes it is. But an important difference exists between the ownership interest passing to the survivor and the public record clearly reflecting what happened. The surviving owner may still need to complete documents and meet recording requirements so the chain of title reflects the death of the other joint tenant.
Start With the Deed, Not With Assumptions
Before making plans for the property, obtain and review the recorded deed. The wording matters. A surviving family member should not assume that property was held in joint tenancy merely because both names appeared on the property or because everyone in the family understood the house to be “jointly owned.”
California courts recommend reviewing the deed and other ownership records to determine how the property was actually held and whether a right of survivorship applies.
This becomes particularly important when the surviving owner wants to sell, refinance or otherwise deal with the property. A title issue that appears minor at the beginning can become much more significant when a transaction is underway.
Clearing the Deceased Joint Tenant From Title
When joint tenancy and the right of survivorship apply, an Affidavit of Death of Joint Tenant is commonly used to document the death and update the record title. A certified death certificate and other recording or change-of-ownership documentation may also be required. Confirm the exact documents and procedures for your county and circumstances.
The California Board of Equalization describes the Affidavit of Death of Joint Tenant as a document commonly recorded to remove the deceased joint tenant from title. California also has change-of-ownership reporting requirements associated with real-property transfers, and the applicable forms and deadlines depend on the circumstances.
This is one of those situations where it pays to distinguish between two questions: Who owns the interest after death? And does the recorded title now clearly show that ownership? They are related questions, but not quite the same.
Joint Tenancy Does Not Make Every Other Issue Disappear
Avoiding formal probate for a particular jointly held property does not mean that every estate, tax, or property issue disappears. The decedent may have other assets requiring administration, and the death of a joint tenant can have property-tax, income-tax, estate-planning or other consequences depending on the circumstances.
California’s property-tax rules concerning changes in ownership and exclusions are particularly fact-specific. For example, the Board of Equalization identifies circumstances in which transfers involving joint tenants or qualifying cotenants may or may not result in reassessment.
For that reason, I would not make a real-estate decision based simply on the assumption that “joint tenancy avoids probate, so everything is finished.” Confirm the title, understand what has transferred, and get legal or tax advice when those issues matter to the estate.
When the Surviving Owner Wants to Sell
Once ownership and title are clear, the conversation becomes real estate. Depending on the circumstances, the surviving owner may consider keeping the property, occupying it, renting it, repairing it or selling it. If a sale is being considered, it is useful to understand the property’s condition, current market value, likely preparation costs, and what different sale strategies may produce.
The death of a joint tenant can be emotionally difficult enough without discovering title questions in the middle of escrow. Resolving ownership and recording issues before putting the property on the market can make the eventual transaction considerably easier.
If you have questions about the real-estate side of a jointly owned California property after an owner has died, call me. If the question involves determining legal ownership, preparing legal documents or tax consequences, an attorney or qualified tax professional should address that part of the matter.
