Joint Tenancy: Advantages and Drawbacks

Joint Tenancy: Advantages and Drawbacks

5 Min.

Joint tenancy simplifies beneficiary access to accounts without court involvement. Couples and partners can hold bank, brokerage, and real estate jointly, using rights of survivorship.


Joint tenancy offers advantages: evading probate, sharing duties, and ensuring continuity. However, challenges entail consensus, asset freezing, and post-death asset control loss. An alternative, tenancy in common, mitigates joint tenancy downsides.

Survivorship in Joint Tenancy: Exploring Ownership and Implications

Joint tenancy with rights of survivorship (JTWROS) embodies shared ownership involving a minimum of two individuals. Within this framework, co-owners possess equal stakes in the account's assets, coupled with survivorship entitlements in case of an account holder's demise.

In essence, this structure signifies that upon the passing of one partner or spouse, the surviving individual inherits the entirety of the funds or assets. This accounts for the appeal among married couples and business associates. Nevertheless, prior to embracing joint tenancy, there exist essential factors to ponder. Let's delve into the merits and demerits of this arrangement.

Streamline Inheritance: JTWROS and Probate Simplification

When an individual passes away, their will undergoes scrutiny in a probate court. This legal process assesses the will's validity and its binding status. The court also identifies the deceased's liabilities and assets. Subsequently, it disburses any remaining assets among heirs.

In scenarios where an individual has no will, complications arise. The absence of a will deprives the probate court of written instructions on asset distribution. The probate process, unfortunately, consumes considerable time in estate resolution. This delay translates to beneficiaries waiting even longer for their rightful inheritance.

JTWROS offers a remedy by seamlessly transferring ownership to a spouse or partner upon the first partner's demise. This maneuver bypasses probate altogether. For those requiring prompt access to funds, this advantage proves invaluable.

Joint Responsibility in JTWROS: Shared Liabilities and Benefits

In the realm of JTWROS, whether among married pairs or business associates, asset ownership translates to collective responsibility. In essence, every individual assumes liability for the asset, reaping its benefits and bearing its burdens on an equitable scale. This setup also precludes any party from incurring debt related to the asset without entangling others in the obligation.

For instance, in the event of a couple contemplating divorce, one spouse cannot secure a loan against their shared property and abscond, leaving the debt burden to the other. The instant a loan is procured, both parties become jointly liable for its reimbursement. Likewise, if one spouse seeks to lease a portion of the property while divorce proceedings are underway, the profits must be shared with the other party, upholding the principle of unity in responsibility.

Seamless Transition in Joint Tenancy

Upon an individual's demise, their assets frequently undergo a freeze, awaiting probate court resolutions. This legal procedure involves assessing encumbrances and designing a strategy for disbursing remaining assets to heirs. For surviving spouses burdened by debts or significant fixed expenses, this process can pose challenges.

However, through joint tenancy ownership, the surviving spouse or business partner retains unbounded authority over the asset. They possess the liberty to retain, vend, or mortgage the property as deemed suitable. Remarkably, the law mandates immediate transference of ownership to the survivor upon the demise of one joint tenant. Joint tenancy emerges as an invaluable conduit, especially when the goal is a seamless transfer of a family business to heirs who are existing partners.

Challenges in Relationships with JTWROS Ownership

In an environment of instability, be it personal or professional, co-owning an asset with another person can pose disadvantages. Whether among couples or business associates, disagreements can lead to complications. In such instances, the inability to sell or encumber the asset without unanimous consent hinders swift action. This safeguard is designed to prevent exploitation. However, the prerequisite for unanimous agreement can impede necessary decisions.

Account Freezing in Joint Tenancy

In specific scenarios, probate courts have the authority to freeze joint tenant accounts. Instances include significant debt following an individual's passing. If a surviving partner might liquidate the account to evade obligations, action is probable. Accounts can also be frozen when debates arise regarding contributions from a surviving spouse or business partner. In such cases, acting in good faith minimizes the likelihood of account freezing.

Relinquishing Asset Control in Joint Tenancy

An additional drawback to joint tenancy surfaces in the form of relinquished control over asset distribution. Surviving partners hold the reins over the joint asset, enabling sales or bequests to other individuals. Essentially, the deceased's authority in determining post-death asset disposition diminishes.

Exploring Tenancy in Common: An Alternative Perspective

Diverging from joint tenancy, a plausible alternative surfaces: tenancy in common. There are some noteworthy advantages.

Divided Asset Ownership

Ownership is fragmented into fractional shares, which may or may not be uniform. Additionally, each party retains the liberty to vend their share without necessitating others' endorsement.

Inheritance Protocol

In contrast to JTWROS, the asset's transition to a surviving owner post the initial owner's demise is not automatic. Instead, asset ownership adheres to stipulations outlined in the deceased's will. Typically, most tenants bequeath the asset to heirs. Nevertheless, if the will contains such a provision, the asset could still transfer to the other owner.

Unhindered Asset Access

Should one owner face disability or demise, the other owner retains the ability to access their share. This implies the capability to vend a segment of the asset sans awaiting a probate court verdict.


When contemplating the establishment of either JTWROS or tenancy in common, it's essential to assess the merits of each approach based on your unique circumstances.

Tenancy in Common
Joint Tenancy
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