Joint Tenancy vs Probate: When Property Automatically Transfers

Property That Transfers the Moment Someone Dies

Most people know that when someone dies, their property has to go through probate. What fewer people understand is that certain ownership structures cause property to transfer automatically at death, completely outside the probate process.

Joint tenancy with right of survivorship is one of the most commonly used of these structures. When property is owned this way, the surviving owner becomes the sole owner the instant the other owner dies. No court. No will. No waiting period. The transfer is automatic by operation of law.

For North Carolina families, understanding how this works (and where it can go wrong) is essential both for estate planning and for managing an estate after death.

Afterpath’s task management system handles both scenarios: estates where joint tenancy is working as intended (you’re helping a surviving joint owner document the transfer) and estates where joint tenancy creates complications (ownership disputes, creditor questions, tax issues).

The Four Unities: What Makes Joint Tenancy Work

In property law, a “joint tenancy” exists when all owners share four specific characteristics simultaneously, known as the “four unities”:

1. Unity of time: All owners acquired their ownership at the same time
2. Unity of title: All owners acquired their ownership through the same instrument (the same deed or document)
3. Unity of interest: All owners hold equal shares of the property
4. Unity of possession: All owners have the right to possess the entire property

When all four exist and the deed explicitly includes “right of survivorship” language, the property passes automatically to the surviving owner(s) at death.

In North Carolina, it’s important to note that joint tenancy doesn’t arise automatically just because two people share ownership. The deed must expressly state the right of survivorship. Under NC law, co-owned property is presumed to be “tenants in common” (which does NOT carry survivorship rights) unless the deed specifically says otherwise.

This is a critical detail. A deed that says “John Smith and Mary Smith” (without more) creates tenants in common in NC, not joint tenants with right of survivorship.

Joint Tenancy vs. Tenants in Common: The Critical Distinction

These two forms of co-ownership look similar but work very differently at death.

Joint Tenancy with Right of Survivorship (JTWROS)

• Deed language: “John Smith and Mary Smith, as joint tenants with right of survivorship” (or “JTWROS”)
• At death: The surviving owner automatically inherits the deceased’s share
• Probate: Not required for the survivorship transfer
• Will: Cannot override the survivorship right
• Creditors: Generally cannot reach the property after survivorship transfer

Tenants in Common

• Deed language: “John Smith and Mary Smith, as tenants in common” (or no survivorship language)
• At death: The deceased owner’s share passes through their estate (probate or intestacy)
• Probate: Required for the deceased’s share
• Will: Controls where the deceased’s share goes
• Creditors: Can reach the deceased’s share during probate

Example: Tom and Susan own a house together. Tom dies.

If they held it as JTWROS: Susan automatically owns 100% of the house. She records a death certificate with the county register of deeds and the transfer is complete. No probate needed.

If they held it as tenants in common: Tom’s 50% goes through his estate. If Tom had a will leaving everything to his brother Bill, then Bill (a stranger to Susan) now owns 50% of the house with Susan. If Tom had no will, NC intestacy law determines who gets his 50%. This can be a very uncomfortable situation.

Tenancy by the Entirety: The Married Couple Version

North Carolina recognizes tenancy by the entirety, a special form of joint ownership available only to legally married couples. Under NCGS § 39-13.6, property held as tenancy by the entirety:

• Carries automatic right of survivorship (same as JTWROS)
• Provides additional creditor protection: a creditor of only one spouse generally cannot force the sale of property held as tenancy by the entirety
• Requires both spouses to agree to any transfer or encumbrance during the marriage

This is the default form of ownership for real property purchased by married couples in NC. When a married couple buys a home together, the deed typically creates tenancy by the entirety automatically unless otherwise specified.

The creditor protection aspect is significant. If one spouse has significant personal debts (medical bills, business debts, credit card debt), tenancy by the entirety protects the marital home from creditors of that individual spouse. The protection ends, however, if the couple divorces (converting the ownership to tenants in common) or if the creditor is joint (a debt both spouses owe).

How the Survivorship Transfer Works in Practice

When a co-owner dies, transferring property held with right of survivorship requires remarkably little paperwork:

Step 1: Obtain a certified death certificate The county register of deeds requires a certified death certificate to record the survivorship transfer.

Step 2: Record an Affidavit of Survivorship (or similar document) In NC, the surviving owner typically records an affidavit at the county register of deeds office, stating that they held the property as joint tenants with right of survivorship, that the co-owner has died, and identifying the property. This officially updates the title records.

Step 3: Update insurance and mortgage records Notify the homeowner’s insurance company and the mortgage servicer of the ownership change.

Step 4: Update tax records Notify the county tax office so property tax bills reflect the new ownership.

That’s it. The entire process can be completed in a matter of days to weeks, compared to the 6-18 months typical for probate in NC.

The executor of the deceased’s estate generally has no role in this process. The surviving owner handles it directly. The property doesn’t appear on the estate inventory because it’s not a probate asset.

When Joint Tenancy is Part of the Estate’s Asset Picture

As an executor in NC, you’ll encounter joint tenancy in two ways:

Properly handled (no action needed): The surviving owner handles the transfer themselves. You identify the property in your initial asset survey, confirm it was held with right of survivorship, and note it as a non-probate asset that requires no action from you.

Potentially problematic situations that need attention:

• The surviving owner and the estate are in dispute about whether the survivorship language was valid
• The deceased’s creditors are claiming the transfer was fraudulent
• The property was jointly owned by multiple parties and the survivorship situation is unclear
• There are questions about whether all parties to the joint tenancy are still living

For complicated joint ownership situations, consult an NC estate attorney through Afterpath’s professional marketplace.

The Risks of Using Joint Tenancy as an Estate Planning Tool

Joint tenancy is a powerful and simple probate-avoidance tool, but it comes with meaningful risks that must be considered before using it.

Risk 1: Loss of Control

When you add someone to your property as a joint tenant, you’ve given them a real ownership interest immediately. You can no longer sell or refinance without their consent. If they develop financial problems and a creditor gets a judgment against them, that judgment may attach to their interest in the property.

Example: A parent adds an adult child as a joint tenant on their home, intending to make transfer simple at death. The adult child gets sued and a $100,000 judgment is entered against them. The judgment attaches to the child’s interest in the home. Now the parent can’t sell their own home without dealing with the child’s creditor.

Risk 2: Gift Tax Implications

Adding someone to your property as a joint tenant is a taxable gift for federal gift tax purposes if the value of their interest exceeds the annual gift tax exclusion ($18,000 in 2024). For high-value properties, this can trigger gift tax reporting obligations.

Consult a tax advisor before adding someone to a deed.

Risk 3: Loss of Step-Up in Tax Basis

When you inherit property through a will or intestacy, you generally receive a “stepped-up” tax basis (the property’s basis is adjusted to its fair market value at the date of death). This can dramatically reduce capital gains taxes if you later sell the property.

When property passes through joint tenancy survivorship, the tax basis rules are more complex. Only the deceased’s share of the property receives a step-up. The surviving owner’s original basis doesn’t change. For highly appreciated property, this can mean higher capital gains taxes when the survivor eventually sells.

Example: Two siblings bought a house together as JTWROS for $100,000 (each with a $50,000 basis). One sibling dies when the property is worth $500,000. The surviving sibling’s basis is $50,000 (original) plus $250,000 (step-up for the deceased’s half) = $300,000. Not a full step-up.

If the property had been inherited entirely by the survivor through a will, the entire $500,000 value would be the new basis, eliminating all capital gains on the pre-death appreciation.

Risk 4: Severing the Joint Tenancy

A joint tenancy can be “severed” (converted to tenants in common) by certain actions. If one joint tenant sells or transfers their interest, the new owner and the remaining owner become tenants in common, losing the survivorship right.

This can happen accidentally or intentionally, and it permanently changes how the property will pass at death.

Risk 5: The Wrong Person Gets the Property

Once survivorship rights are established, the will cannot change them. If relationships change (divorce, estrangement, a change in who you want to inherit), simply updating your will isn’t enough. The joint tenancy itself must be changed.

Example: A parent adds their oldest child to a home as a joint tenant. Later, the parent wants to leave the home equally to all three children. Unless the joint tenancy is changed (either to tenants in common or to a different arrangement), the oldest child will automatically receive the entire home at the parent’s death, regardless of any will provision to the contrary.

Comparing Joint Tenancy to Other Probate-Avoidance Tools

Tool	Probate Avoided	Privacy	Control Retained	Best For
Joint tenancy (JTWROS)	Yes	Yes	Partial (co-owner must consent to sales)	Married couples, simple two-party situations
Tenancy by the entirety	Yes	Yes	Yes (plus creditor protection)	Married couples only
Transfer on death deed	Yes	Yes	Yes (during lifetime)	Single owners, simple beneficiary situations
Revocable living trust	Yes	Yes	Yes	Complex estates, multiple beneficiaries, ongoing control
POD/TOD on accounts	Yes	Yes	Yes	Bank and investment accounts
Will	No	No	Yes	Control over complex distributions

For most NC homeowners, the decision comes down to: joint tenancy (or tenancy by the entirety) for simplicity, a transfer on death deed for individual owners, or a living trust for more complex situations.

For a complete comparison of trusts and wills, see our guide on living trust vs will in NC. For an overview of which assets require probate, see our guide on what assets go through probate in NC.

Joint Tenancy for Non-Real-Property Assets

The survivorship concept extends beyond real property:

Joint bank accounts: Many bank accounts are held jointly with right of survivorship. When one account holder dies, the surviving holder becomes the sole owner automatically. This is extremely common among married couples and between parents and children who are managing finances together.

Investment accounts: Brokerage accounts can be held with JTWROS designation. Some accounts use “transfer on death” (TOD) instead, which functions similarly but doesn’t create a current ownership interest in the other person (reducing the control and gift tax issues).

Vehicles: NC doesn’t use JTWROS titling for vehicles in the same way as real property. However, the DMV does recognize survivorship provisions on some vehicle titles.

What Happens to Joint Tenancy Property in an Insolvent Estate

If an estate is insolvent (owes more in debts than it has in assets), creditors naturally look to any possible source of recovery. Can they reach jointly-owned property that passed through survivorship?

Generally, the answer is no. Once property transfers to the surviving owner through survivorship, it’s no longer part of the deceased’s estate and is not available to satisfy the deceased’s creditors.

However, there are exceptions:

• If the creditor can show the joint tenancy was created specifically to defraud creditors (fraudulent transfer)
• If the joint tenancy was created shortly before death while the deceased was insolvent
• For certain federal creditors like the IRS, which have broader collection authority

For most situations, the survivorship transfer is protected. But in insolvent estate situations, consulting an NC estate attorney is strongly recommended.

How Afterpath Helps You Navigate Joint Tenancy Situations

Whether you’re managing an estate where joint tenancy is involved or helping a surviving owner document their transfer, Afterpath provides the right support.

Task management includes specific tasks for identifying jointly-owned assets, confirming survivorship language, and guiding the surviving owner through the recording process.

Pathfinder can explain how joint tenancy interacts with the broader estate, whether survivorship transfers affect the estate inventory, and how to handle situations where the ownership language is unclear.

NC compliance engine generates any court forms needed if joint tenancy issues require court resolution, and helps with the estate inventory by correctly excluding non-probate joint tenancy assets.

Document vault stores deeds, account titles, and other ownership documents so you have clear records of each asset’s ownership structure.

Professional marketplace connects you with NC real estate attorneys or estate attorneys when joint tenancy situations are complicated: disputes, creditor issues, or questions about whether survivorship language is valid.

Frequently Asked Questions

Q: Can I remove someone from a joint tenancy without their consent?

A: No. Unlike POD designations (which you can change unilaterally), a joint tenancy is a current ownership interest. Severing a joint tenancy requires either the co-owner’s agreement or a legal process. If you want to change the ownership structure of real property held in joint tenancy, both parties must sign a new deed.

Q: Does the surviving joint tenant have to go through probate to claim the property?

A: No. The survivorship transfer happens automatically by operation of law. The surviving owner must record the transfer (by filing an affidavit and certified death certificate with the county register of deeds), but this is a recording process, not a probate process. It can be done independently of any estate administration.

Q: What if two joint tenants die at the same time?

A: NC law addresses simultaneous death situations. Under the Uniform Simultaneous Death Act, if joint tenants die simultaneously and there’s no evidence of who died first, each is treated as having predeceased the other. The property passes as if each owned their share separately, which means both shares go through their respective estates (and probate).

Q: If property is held as JTWROS but the deed is unclear, what happens?

A: NC presumes tenants in common when the survivorship language is ambiguous or absent. A deed that says “John and Mary Smith” without survivorship language is presumed to create tenants in common. If the intent was JTWROS, a new deed may need to be recorded to clarify the ownership. This is worth doing before either owner dies.

Q: How can Afterpath help with a home that passed through joint tenancy survivorship?

A: Afterpath’s task management guides the executor and surviving owner through correctly identifying the home as a non-probate asset, documenting the survivorship transfer, and updating all relevant records. Pathfinder explains how this affects the estate inventory and what role (if any) the executor plays in the transfer. The NC compliance engine ensures all forms related to the estate are handled correctly even when the primary asset passed outside of probate.

Closing: Simple, Powerful, But Not Risk-Free

Joint tenancy with right of survivorship is one of the most effective and simple tools for avoiding probate in North Carolina. For married couples, tenancy by the entirety adds creditor protection on top of the survivorship benefit.

But the simplicity can be misleading. The loss of individual control, the gift tax implications, the step-up basis considerations, and the inability to change distribution through a will are all real trade-offs that deserve thoughtful analysis before you add someone to your property.

For many families in NC, joint tenancy is exactly the right tool. For others, a transfer on death deed or a living trust provides better control with similar probate-avoidance benefits.

Understand the tool. Use it intentionally. And update the ownership structure when life changes, because a will alone won’t fix it.

Managing an estate that includes jointly-owned property?

Afterpath helps executors and surviving owners navigate every asset type in an NC estate, including joint tenancy property, with step-by-step guidance and NC-specific forms. Your first assessment is free.

Start Your Estate Assessment →