One of the advantages to holding property in joint names is that it may avoid the probate process. In Pennsylvania, estates must pass through probate even when a decedent dies intestate, which means without leaving a will. The probate process moves ownership of a decedent's assets to his heirs or beneficiaries, so it's necessary when no other way exists to effectuate the transfer. When title vests with another individual automatically, as with some types of joint property, probate isn’t necessary. Disposition of the joint property when there is no will is often determined by how title to the property is held.
Joint Tenancy With Rights of Survivorship
Pennsylvania law recognizes several types of joint ownership of property. Married individuals often hold title to their home as joint tenants with rights of survivorship. The “rights of survivorship” clause affects probate. When one spouse dies, it automatically transfers title directly to the surviving tenant. Therefore, probate isn't necessary to retitle the asset. This type of ownership does not only apply to real estate in Pennsylvania. Joint owners of bank accounts and motor vehicles can also hold title with rights of survivorship.
Tenancy by the Entirety
Tenancies held by the entirety also bypass probate in Pennsylvania. The interest held by the decedent transfers directly to the survivor when the decedent dies. This type of ownership differs from joint tenancy in that this form of ownership is only available to married couples. Like joint tenancy, in tenancy by the entirety, when one tenant dies, that tenant's interest is directly passed to the surviving tenant without the need for probate.
Tenants in Common
Property held by tenants in common requires probate, and when a co-owner dies intestate, this can complicate the transfer of title. When property is held by tenants in common, they can each own an interest in the property. One might own half, and two others might own one-quarter of the property each. Regardless of ownership percentage, all tenants in common have a right to use the whole property. Every tenant has the right to transfer or sell his portion. When a co-owner dies intestate, it can create the question of which heir receives the decedent’s share of the property. For example, if the decedent was married, but had no children and his parents are no longer living, his spouse receives the entirety of his state, including his portion of the property. However, if he also left children or living parents, passage of his estate occurs to all these individuals in percentages. This might result in several people jointly owning the decedent's share in the property. More often, one heir might take the decedent's interest in the property, with other heirs receiving other assets, the value of which reflects the percentage of property they are entitled to inherit.
Pennsylvania imposes an inheritance tax, regardless of whether decedents leave wills. However, when spouses own property together as joint tenants with rights of survivorship, the property is not subject to this tax -- provided they created the joint tenancy more than a year before the decedent died. If the decedent wasn't married to his co-owner, his share is taxable to the estate. Property owned as tenants by the entirety is not taxable, but property held as tenants in common is. Pennsylvania's tax rate ranges from zero percent if the decedent’s spouse takes ownership, to 4.5 percent if one of his children or his parents do so, up to 12 percent if his siblings inherit his share.