Right of Survivorship is a legal concept widely used in the real estate investment industry, primarily in joint ownership or tenancy situations. When two or more individuals jointly own a property with the Right of Survivorship, it means that if one owner dies, their ownership interest in the property will automatically pass to the surviving owner(s), without the need for probate.
This concept is common in several types of joint ownership arrangements, such as:
- Joint Tenancy: This is where two or more people own a property together, each with equal rights to the property. The Right of Survivorship applies, meaning that when one tenant dies, their share of the property is distributed among the surviving tenants.
- Tenancy by the Entirety: This is a special form of joint tenancy that only applies to married couples (and in some places, to registered domestic partners). It also includes the Right of Survivorship, and it also has additional protections, such as protection against the creditors of one spouse.
- Community Property with Right of Survivorship: Some states allow married couples or registered domestic partners to hold property as community property with the Right of Survivorship. This allows the surviving spouse or partner to automatically receive the deceased person’s share of the property.
Having the Right of Survivorship can simplify the transfer of property upon death, but it also comes with legal and tax implications that vary based on the laws of the particular state or jurisdiction. Investors or property owners should consider consulting a real estate attorney or legal expert to ensure that the ownership structure aligns with their estate planning objectives and that they fully understand the implications of holding property with the Right of Survivorship.