Understanding Right of Survivorship in Estate Planning

When it comes to estate planning, having an understanding of right of survivorship is extremely important. Right of survivorship is a legal concept that enables a surviving co-owner to automatically become the new and sole owner of the shared asset upon the death of the other co-owner.

For example, if two individuals purchase joint real estate, the right of survivorship dictates that in the event of the death of either of the two people, the remaining survivor will automatically become the new, sole owner of the property. The advantages of this are that the property is no longer subject to probate court, and can instead be transferred directly and immediately to the new owner.

Right of survivorship also applies to financial accounts, such as bank accounts, brokerage accounts, mutual funds, stock accounts and other financial assets. The benefit here is that the survivor gets “series of survivorship” ordered, meaning that the surviving owner of the account is subject to no delays or financial costs.

The Benefits of Right of Survivorship

The primary benefit of right of survivorship is that the transfer of ownership of assets is simplified in the event of the death of one of the co-owners. It also enables owners to maintain complete control over the asset, preventing it being allocated to the decedent’s creditors or being divided among the decedent’s heirs.

Other benefits of right of survivorship include: easier asset transfers, faster transfer of ownership, simplifying the probate process, ability to keep assets out of the court system, and protecting the asset from creditors of the deceased.

What Steps Should You Take to Ensure Right of Survivorship Applies?

In order to ensure that the right of survivorship applies to an asset, it is important to take a few steps. One of the most important steps is to make sure that the asset is titled jointly with right of survivorship language on the actual title/deed/ownership document. This is the official document that will verify and confirm that the right of survivorship applies to the asset.

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In addition, it is important to discuss the plans for the asset with a lawyer and include specific language in a Last Will & Testament that confirms that the right of survivorship applies to the asset. This will ensure that the asset transfers to the survivor without delays, costs or other complications.

Ultimately, having an understanding of the legal concept of right of survivorship is important to ensure that the assets you have established jointly are distributed according to your wishes in the event of the death of one of the co-owners.

Related Legal Concepts

Understanding right of survivorship often goes hand in hand with community property with right of survivorship, which provides similar automatic transfer benefits for married couples in certain states. The concept of survivorship itself is fundamental to many estate planning strategies, while the broader legal concept of right encompasses the various ownership interests individuals can hold in property. Those exploring joint ownership arrangements should also understand preemptive right, which can affect how ownership interests may be transferred or modified during the owners’ lifetimes.

The Bottom Line

Right of survivorship provides a powerful tool for avoiding probate and ensuring seamless transfer of jointly-owned assets upon death. This legal mechanism offers significant advantages including cost savings, time efficiency, and protection from creditors, but requires proper documentation and titling to be effective. Understanding how this concept works is essential for anyone considering joint ownership of real estate, financial accounts, or other valuable assets. For guidance specific to your situation, always consult a qualified, licensed attorney.