The Difference Between JTWROS & JT TEN

Sorting out the very subtle (and possibly important) distinction between the two acronyms.

Provided by Tiffany Valentine, Vice President and Director of Financial Planning

JTWROS. JT TEN. What do these acronyms stand for? To what degree do their meanings differ? If you own or co-own assets, you should know the subtle distinction that some states make between them.

JTWROS stands for Joint Tenancy with Right of Survivorship. JT TEN stands for Joint Tenants with Right of Survivorship. No difference, right? Well, in some states, courts may see one. Here is a discussion of the meaning of each ownership option, and some fine print worth knowing about. 

A JTWROS ownership option gives each co-owner equal rights to an asset or account. When a co-owner dies, the asset/account then passes to the surviving owner(s) without going through probate. The surviving owner(s) then own(s) 100% of the asset/account.1   

Is JT TEN just another way to spell JTWROS? In many states, yes – but not all. Most states regard JT TEN as the equivalent of JTWROS, and do not interpret the “TEN” in JT TEN to mean “tenants in common,” which is also called “tenancy by the entirety.” Some states, however, do interpret it to mean “tenants in common.” That interpretation may lead to an asset being probated.

When two or more people own an asset or an account as tenants in common, the right of survivorship is not conveyed to the surviving owner when one owner dies. Instead, when an owner passes away, that ownership share passes through his or her estate as per the terms stated in his or her will – and that leaves the asset open to probate. If the co-owner dies without a will, then the ownership share passes to surviving heirs.2,3

Some states make subtle distinctions. Take Michigan, for example. If a title document contains the phrase “as joint tenants and not as tenants in common,” any co-owner of real property can terminate the joint tenancy. If property is transferred to new owners “as joint tenants with right of survivorship” (i.e., JTWROS) or to the new owners “and the survivor of them,” a co-owner cannot terminate the joint tenancy unilaterally.4

In Texas, co-owners of property can’t hold real estate in joint tenancy merely by including the JTWROS acronym on a title document. Legally speaking, they must go a step further: all the joint tenants have to sign a written agreement certifying the creation of the joint tenancy. There have been court battles in Texas over such documentation, or the lack thereof. Sometimes things have gone the other way: in 2009, the Texas Supreme Court ruled that a married couple whose investment accounts were titled “JT TEN” did have survivorship rights, even without the use or appearance of the JTWROS acronym on those accounts.4

Some states want you to be explicit when it comes to JTWROS. South Carolina instructs property owners to use the phrase “as joint tenants with rights of survivorship, and not as tenants in common,” instead of the mere JTWROS acronym, for added clarity.4

You should keep these distinctions in mind. Tiny as they may seem, you may have to know about them if you buy, sell, or inherit property in certain states.

Tiffany Valentine is a Registered Representative with and, securities and advisory services  offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC CA Insurance License # 0D73175

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – tinyurl.com/jdr9fv9 [7/28/15]
2 – homeguides.sfgate.com/joint-tenancy-rights-survivorship-vs-tenants-common-57739.html [10/17/16]
3 – homeguides.sfgate.com/tenants-common-rights-survivorship-1434.html [10/17/16]
4 – nolo.com/legal-encyclopedia/how-take-title-joint-tenancy.html [10/17/16]