JTWROS Explained

Being a lawyer, I know some things that occasionally are useful to the minions. Here’s one such thing. Georgia has a thing called Joint Tenants With Rights of Survivorship (JTWROS) for warranty deeds. Sadly, many of you have not availed yourself of this legal nicety and it’s going to cost your spouse when your life insurance matures. Or vice versa.

A lot of husband and wife deeds are titled in what the law calls “tenants in common.” A tenants in common deed means that the listed names (the deed can have many names on it) each have an ownership interest that survives their demise. So if I die as a “tenants in common” owner of a property, my share is part of my estate. In some instances, that may be what everyone intends. My share then goes through probate to be retitled in the name of my estate beneficiaries. Fine and good. 

Yet in a marital bliss situation, that makes little sense. If Bill and Sally have been happily married for years, with children only of that marriage, then why would they purposefully make the survivor of the two go through probate to get the house upon the death of the spouse? You wouldn’t. At least, not on purpose.

JTWROS is a legal instrument that says that upon the death of one, the property automatically is vested in the survivor. There is no probate. There is no need to do a new deed. It is automatically vested in the survivor. 

Now that may not be the parties’ intention sometimes. If there are children not born of both, those children may feel left out if their parent dies first, since the survivor may leave the property to his/her children. So it’s important to consider the ramifications, but usually JTWROS is a better planning tool for most couples. 

Some real estate lawyers ask how a couple want title to be stated when buying property, but some don’t. If the deed just says Bill and Sally, that is, tenants in common, and there will have to be probate upon the death of the first one. I mentioned that one time to an attorney and he told me that it was “good business” to make them come back for probate later. Sorta like it’s good business for a surgeon to leave a sponge inside a wound so the patient has to come back for more surgery. 

What does your deed say? I’m not clairvoyant, you’ll need to look. If you can’t find your deed in a shoebox in your closet, you can go to the clerk’s website and look it up. If the deed says “with rights of survivorship,” that is good. If it doesn’t have those magic words, then the deed is “tenants in common” and Bill and Sally each own half. It’s not too late to change to JTWROS so long as both of you are competent. It’s not terribly expensive either. 

Now some of you smarty pants are thinking, “My spouse has already died, so I’ll list my son as a joint tenant, thus avoiding my house going through probate upon my death!” Hah! I beat the system that way. Not so fast, Albert Einstein. There is a thing called “stepped up basis,” which means you get to avoid capital gains when you get mom and dad’s house, IF it passes through a will or trust, but not through a deed. So doing a JTWROS with Sonny may actually cost tens of thousands of dollars in taxes. I’m not a CPA so I’d suggest you consult with one before doing that. 

The other problem with titling your property in Sonny’s name? Sonny’s debts now attach to your property. It happens. A lot! Probate costs a few bucks, but it beats losing your house to Sonny’s gambling debts. 

If you made it to the end of this informative column, you are a little smarter than you were 10 minutes ago. 

Kelly Burke was born in Knoxville, Tennessee, where he spent his younger years, followed by his high school years in Atlanta, where he graduated from Georgia Tech, followed by Mercer Law School. He has been in the private practice of law, a magistrate judge, and an elected district attorney. He writes about the law, politics, music, and Ireland. He and his wife enjoy gardening, playing with their Lagotto Ramagnolo named George Harrison, and spending time with their grandchildren.