What Is the Benefit of Survivorship?

A legal arrangement known as “with the benefit of survivorship” ensures that co-owners of the property immediately acquire full ownership upon the death of another co-owner. The legal snags associated with estate settlements are avoided with this method.

Understanding the Benefit of Survivorship

Generally speaking, “with the benefit of survivorship” refers to joint tenancy ownership, in which the assets automatically transfer to one or more surviving members of the agreement upon the death of one owner. Known as “joint tenants with rights of survivorship,” these contracts are often made when two or more individuals hold expensive assets like real estate, companies, or investment accounts.

When transferring an estate’s assets to heirs, joint tenancy with the benefit of survivorship avoids the probate procedure that would otherwise be required.

Tenancy in Common and Joint Tenancy

Survivorship benefits are often the deciding factor when joining a joint tenancy. According to common law, a cooperative tenancy agreement must be recognized under certain conditions. Each co-owner must get the same title to the asset at the same time and have equal authority over their portion of it. Equal ownership rights must also apply to each owner of the item. Contracts that meet all of these criteria can be considered joint tenants.

Tenancy in common (TIC) agreements provide a way to co-own property without receiving the benefit of survivorship. Tenancy in joint arrangements includes all co-ownership scenarios that do not satisfy the requirements for communal living and schemes where one or more co-owners want to transfer their ownership stake to a third party in the event of their passing. While assets automatically given to survivors under a shared tenancy do not circumvent the probate procedure, assets inherited from the tenancy in joint agreements can.

Additional Contracts With Survivor Beneficiaries

The passing of survivor benefits is one of the other estate planning components. In particular, upon the insured person’s death, annuities, retirement plans, life insurance, and Social Security payments may transfer automatically to a successor. Some insurance policies and annuities provide riders that enable the insurance policy or annuity to pass to a selected survivor when the primary insured or annuitant dies, in addition to the standard transfer of such assets via a named beneficiary. Variable survivor life insurance and joint and survivor annuities are two examples.

An Illustration of the Benefit of Survivorship

When a married couple held a house jointly with the right of survivorship, the surviving spouse would immediately become the owner of the whole property upon the death of their partner. Suppose there is no agreement or another estate-planning tool, such as a trust. In that case, the house will go through a lengthy and often unsatisfactory probate procedure, which is only sometimes in line with the wishes of all the beneficiaries.

Conclusion

• A legal arrangement known as “with benefit of survivorship” grants one co-owner of a piece of property complete ownership in the event of the other’s death.
• It avoids the probate procedure, often used to distribute an estate’s assets to surviving family members.
• According to a crucial clause in the agreement, every co-owner must simultaneously get the same title to the asset and have equal authority over their portion.