Joint tenancy with right of survivorship

Creating and ending a real estate joint tenancy

In Minnesota, for example, land granted or devised to two or more people creates a tenancy in common unless joint tenancy is expressly declared, with exceptions for mortgages, trusts, and executors, and other states differ.

In Minnesota, for example, a joint tenant’s severance of a real estate joint tenancy is effective only through one of these four routes, and other states differ:

• A severance instrument recorded with the county recorder or registrar of titles in the county where the land is situated.
• A severance instrument executed by all joint tenants.
• Severance ordered by a court of competent jurisdiction.
• Severance effected through a joint tenant’s bankruptcy.

In Minnesota, for example, a marriage dissolution decree also severs the spouses’ real estate joint tenancies unless the decree expressly continues joint tenancy ownership, and other states differ.

Joint accounts have their own ownership rules

In Minnesota, for example, lifetime ownership of joint account deposits follows each party’s net contributions unless clear and convincing evidence establishes a different intent, and other states differ.

In Minnesota, for example, deposits remaining at a joint account owner’s death belong to surviving parties as against the estate, subject to two exceptions, and other states differ.

The exceptions are clear and convincing evidence of a different intention or a different disposition in a valid will specifically referring to that account.

Bring both the account agreement and any will provision mentioning the account to your review.

Adding an owner can have gift consequences

For federal gift tax purposes, buying property entirely with your funds and taking title with a donee as joint tenants with survivorship creates a gift of half its value if either owner can sever their interest.

That rule establishes the gift and its amount, without determining whether tax is payable or a return is required.

A different timing rule applies when you create a joint bank account with a donee, or similar ownership allowing you to recover the entire fund without the donee’s consent.

For federal gift tax purposes, a gift occurs when the donee withdraws funds for their own benefit without an obligation to repay you. The gift equals the amount withdrawn without that repayment obligation.

Two related terms

A perspective on starting the conversation

"So I would just encourage all the listeners, if they haven't had a conversation with their estate planning attorney, or they've put off estate planning like most Americans, just 'cause they don't want to think about it"

Common questions