Joint ownership between spouses is extremely common in New York, but owning an asset with another person may cause you headaches if you haven’t properly planned ahead. An asset protection attorney’s help is critical to understanding how different types of co-ownership can affect your tax liability and overall estate planning strategy.
Types of Joint Ownership and How They Work in New York
There's more to consider than just which co-owner will be responsible for the upkeep, maintenance, and payments of a property. You also need to keep in mind protection from creditors and how the probate process will affect your family when you jointly own your home or other real estate.
Deciding on the specific type of co-ownership to use can be a crucial part of ensuring your financial goals are met during your life, and that your estate planning is in order so your heirs are taken care of after you pass away. In New York, the main types of co-ownership to know about include:
- Joint tenancy with right of survivorship. Both owners have an equal share of the property and can sell their share without the other’s permission, although selling your share reverts the property to a tenancy in common. When one owner dies, rights to their share pass to the other owner without needing to go through probate.
- Tenancy in common. Either owner can hold any percentage of the property, but after death that share goes to the co-owner's heirs rather than the other owner. Creditors can also place liens on the property affecting the other co-owner.
- Tenancy by the entirety. Both owners have a 100% stake in the property, and can’t sell without the other’s permission. Creditors can’t place a lien on the property as long as both spouses are alive.
You should discuss these options and their financial implications with an asset protection attorney before jointly purchasing or selling any property. In many cases, putting property or other assets in a trust can be a better option than simply having joint ownership.
Consult an Asset Protection Attorney to Navigate Joint Ownership Issues
Are you starting to consider how to best protect what you’ve earned? Reach out to Alatsas Law Firm today and let us know about your financial goals. We want to help you come up with the best strategy for maximum control over your assets while avoiding unnecessary tax and probate issues.