Family Trusts Vs. Co-Ownership

By John Stevens J.D.

A family trust is a legal entity created as a means of passing family property to family members upon the death of the person or persons who created the trust. In some situations, co-owners of property may structure their ownership interests in a way that provides for the transfer of a deceased co-owner’s property interest. Although there are similarities between a family trust and co-owning property, there are important differences as well.


Probate is a court-supervised process of transferring a deceased person’s property. A family trust is often created to pass property to specified beneficiaries of the trust without the necessity of probate. Although a family trust can end up in probate court if the terms of the trust, or circumstances under which the trust was created, are challenged, these challenges are fairly rare considering the number of family trusts that are created. By substantially reducing the possibility of probate, transferring property into a family trust saves the time and expense associated with the probate process. As with a family trust, a co-ownership property arrangement may also avoid probate, but whether probate is required upon the death of a co-owner depends on how the co-owners held title to the property.


A common form of co-ownership is joint tenancy. Under a joint tenancy arrangement, the surviving joint tenant automatically inherits a deceased joint tenant’s property interest, thereby avoiding probate. Probate may be required, however, when the last surviving joint tenant dies, since there are no other joint tenants who can take the property. Tenancy in common is also a common form of co-ownership. Unlike with joint tenancy, a co-owner’s share does not automatically pass to the other owners upon death. A tenant in common is free to leave her share of the property to virtually anyone. In this case, the surviving tenants in common may find themselves owning the property with a stranger or someone they do not get along with.

Protect your loved ones. Start My Estate Plan

Sale or Transfer of Property

The person in charge of a family trust, called the “trustee,” may transfer or sell trust property so long as the authority for doing so is expressly stated in the terms of the family trust document. If the family trust has two or more trustees, all trustees must usually agree to sell or transfer trust property. Similarly, a co-owner of property may also sell her ownership share, but a co-owner may do so without the consent or knowledge of the other co-owners. If two co-owners own the property as joint tenants, one co-owner can destroy the joint tenancy and eliminate the automatic inheritance feature.


Although trusts are usually created by a written document, not all family trusts require a written document as a prerequisite to their creation. One exception to this rule is if the trust holds real estate, in which case a written document is required. Two or more persons may also own property together without a written document. As with a family trust, however, a written document is required to establish co-ownership of real estate. Co-ownership of real property is created by way of a deed. It is the deed that establishes the identities of the co-owners and specifies how the co-owners hold title. A trust may be more effective at avoiding probate than co-ownership, but creating a family trust is usually more expensive and complicated than preparing a deed.

Protect your loved ones. Start My Estate Plan
Revocable Living Trust & Real Estate Joint Tenancy in Maryland


Related articles

Can a Lien Be Put Against a Living Trust?

A living trust is created to keep the contents of a will private or to guard against the mishandling of funds intended for specific recipients at a future date. This instrument also allows you to pass property and other interests to beneficiaries without the need for probate, which can save time and expenses for the people concerned. Although a lien cannot affect a living trust as an intangible entity, a lien is usually enforceable against the assets it transfers.

Documents for Putting Property Into a Living Trust

Living trusts can be a powerful estate planning tool. Real property, business interests, automobiles, and other personal property can all be used to fund the trust, but the exact process can vary from state to state. In some cases, this requires executing a new deed or title, or filing other transfer documents. Knowing the appropriate state laws and paperwork required to place your property in a trust will help ensure that your property avoids probate.

Connecticut Statute for Joint Property

Joint property ownership allows two parties to simultaneously own property, this legal arrangement is known as a concurrent estate. The Connecticut Code establishes two forms of joint property ownership: joint tenancy and tenancy in common. Connecticut law also establishes specialized laws for common ownership in a condominium situation.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Can You Pass Your Timeshare to Your Heirs?

A timeshare is a luxury item that many timeshare owners would like to transfer to their heirs at death. Generally, a ...

What Happens to Joint Property When Someone Dies Without a Will in Pennsylvania?

One of the advantages to holding property in joint names is that it may avoid the probate process. In Pennsylvania, ...

Changing a Family Trust Deed

A family member may have placed his property into a family trust as part of his estate planning process. Under the ...

Meaning of the Legal Term "Rights of Survivorship"

The term, “Rights of survivorship,” refers to a form of property ownership where two or more people -- often a husband ...

Browse by category
Ready to Begin? GET STARTED