Key Legal Insights: Severing Joint Tenancy with Right of Survivorship in Florida

In Florida, joint tenancy with the right of survivorship (JTWRS) is a common form of property ownership in which two or more individuals co-own property. The unique aspect of JTWRS ownership is the right of survivorship.

This means that upon the death of one joint/co-owner, their interest automatically passes to all other co-owners in equal shares.  In Florida, this is one of the most used and cost-effective probate avoidance measures available.

While joint tenancy with right of survivorship is usually opted for due to its ease in which the asset is transferred, questions often arise regarding whether a joint tenant can transfer or sell their share during their lifetime and the implications of such actions.

This article explores some of this issue in further detail.

Understanding Joint Tenancy with Right of Survivorship in Florida

To answer this question, it is important to understand the nature of JTWRS ownership. In a JTWRS, all joint tenants/co-owners have an equal and undivided right to the property in Florida. To establish a JTWRS, ownership must be established with four essential unities. In Florida, these unities are:

1. Unity of Time: All co-owners acquire their respective interests simultaneously.
2. Unity of Title: All co-owners acquire their interest through the same deed or title.
3. Unity of Interest: All co-owners have an equal share in the property.
4. Unity of Possession: All co-owners have an equal right to possess the entire property.

With respect to the right of survivorship aspect, it ensures that when co-owners die, their share is automatically transferred to the surviving co-owners. It is this feature that distinguishes JTWRS from other forms of co-ownership in which surviving co-owners do not automatically obtain the deceased co-owners’ share, such as with tenancy in common. When there is no right of survivorship, a deceased owner’s share of the property passes in accordance with their Will or Florida’s intestacy law in cases where there is no Will.

Transferring or Selling a Share in JTWRS in Florida

Despite the existence of the four unities previously stated, a joint tenant in a JTWRS arrangement has the legal right to transfer or sell their interest in the property without the consent of the other joint tenants in Florida.

However, such a transfer may have significant consequences:

• (1) Severance of Joint Tenancy: Immediately upon selling or transferring one’s share the joint tenancy is severed with respect to the shared interest in Florida. The new owner does not step into the shoes of the previous joint tenant. In such a case, the new owner becomes a tenant in common with the remaining joint tenants and the right of survivorship no longer applies to the transferred share. When the new owner passes away, it will be passed to their heirs through a probate proceeding via administration of their Will or through intestacy.
• (2) Impact on Remaining Joint Tenants: If the original JTWRS was amongst more than two co-owners, the remaining joint tenants continue to hold their shares as joint tenants with right of survivorship among themselves. However, they now share the property with the new tenant in common. This may cause significant problems if the new tenant in common owner has different intentions or plans for their share.

Statutory References

In Florida, the ability of a joint tenant to unilaterally transfer their interest and the resulting severance of the joint tenancy is well-established in case law and statutes:

• Florida Statutes: Under Florida law, a joint tenancy with right of survivorship is created by including specific language in the deed. According to Florida Statutes Section 689.15, unless the deed expressly states that the co-ownership carries a right of survivorship, then any deed conveying property to two or more individuals will create a tenancy in common, not a joint tenancy. This statute stresses the importance of clear language to establish a JTWRS and avoid unintended consequences of tenant in common ownership.

Practical Considerations

Before deciding to transfer or sell an interest in a property held by JTWRS, it is important to consider the following:

• Intentions of Co-Tenants: Actions by individual co-owners can lead to disputes among co-tenants. This is especially the case if the transfer brings in a third party who may not align with the original co-owners’ agreed upon intentions.
• Legal and Financial Implications: In Florida, severing a joint tenancy can have significant tax consequences, as well as affect estate planning objectives. Such a severance may also affect homestead exemptions previously afforded to the original co-owners of a homestead property. As such, it is advisable to consult with legal and financial professionals to understand the full impact of such a decision prior to taking any steps forward.
• Alternative Arrangements: Often times, co-owners may intend to allow such transfer of interest without the ability to sever joint tenancy. In such cases, using various entities such as a limited liability company (LLC) may be suitable to hold the property. This allows for the transfer of membership interests in accordance with the accompanying operating agreement.

Conclusion on Severing Joint Tenants with Rights of Survivorship

While a joint tenant with right of survivorship can transfer or sell their share of the property, doing so will sever the joint tenancy for that co-owner’s share and will convert the ownership structure into a tenancy in common.

This change can have significant legal and financial implications for all parties involved, especially unknowing co-owners who entered into the co-ownership agreement as a joint tenant with right of survivorship.

As with most matters regarding real estate ownership, it is essential to thoroughly assess the consequences and seek professional advice before proceeding with such a transfer.

For personalized guidance on the various property ownership arrangements and their potential implications, contact us to speak with our qualified team.