Joint tenancy allows multiple owners to hold property at once and even allows that ownership to survive the death of one of the owners. A revocable living trust is a legal structure in which an owner surrenders control of his property to another person to manage for the benefit of a third party. In Maryland, both joint tenancies and revocable living trusts may offer distinct estate planning advantages in terms of avoiding probate.
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In a joint tenancy, multiple owners own a piece of real estate. But joint tenants don't each own a fraction of the whole; rather, they share the simultaneous right to use and enjoy the whole piece of property. Unlike other forms of multiple ownership, a joint tenancy offers the "right of survivorship," meaning that if one joint tenant dies, her interest in the property effectively vanishes and the surviving tenants continue to share equal ownership of the whole property. Joint tenancy is not the favored form of multiple ownership in Maryland. Under Maryland law, multiple parties who want to acquire property as joint tenants have to put explicit language in the deed or other instrument that specifies joint tenancy ownership.
Unities of Tenancy
Creation of a joint tenancy requires four elements, known as unities: all joint tenants must take title at the same time, using the same deed, own an equal proportion of interest and have equal rights to possess the property at the same time. To receive a portion of the property that's completely removed from the joint tenancy, a joint tenant must break at least one of these unities, effectively severing the joint tenancy. Typically, a joint tenant can sever in one of three ways: by executing a written agreement with his fellow joint tenants; by filing a lawsuit to partition, or split, the property; or by transferring his interest to an outside party.
Revocable Living Trust
A trust represents the transfer of a party's ownership rights in property. To create a trust, an owner transfers his ownership interest in property to the trust, where a designated trustee, often the original owner, manages the property for the benefit of someone else, known as the beneficiary. In a revocable living trust, the property owner makes the transfer while she's still living and has the right to revoke or modify the trust at any time before she dies. After her death, however, the trust becomes irrevocable.
Estate Planning Advantages
Revocable living trusts and joint tenancy can each play a part in estate planning. Because the transfer of assets to a revocable living trust occurs during the owner's lifetime, rather than at death, the trust property also manages to avoid probate. Likewise, a joint tenancy's right of survivorship allows the joint tenancy property to pass on to the remaining, or surviving, joint tenants without passing through probate. However, Maryland property owners should note that Maryland has made the probate procedure much simpler for estates valued at $30,000 or less; thus, the advantages of avoiding the probate process through the use of joint tenancies or revocable living trusts may not be as dramatic for smaller estates.