JWROS Deeds: Just Won’t Reflect the Only Solution

Recently there has been a lot of talk about joint with right of survivorship deeds, also known as JWROS deeds. These deeds are a powerful tool in controlling the transfers of assets, but are not appropriate for all people. In some situations, they can down right be a disaster. You may be wondering if you need a JWROS deed in your estate plan. Let’s look at some basic questions and scenarios.

What is a Joint With Right of Survivorship Deed?

A JWROS deed is a deed filed with the state in which two or more persons hold real estate together for their joint lives. When one passes away, the remaining survivors receive the deceased’s share.

A person who has a JWROS deed has a present interest in the real estate. Each person has an equal right to share in the use, occupancy, profits, and costs. The property may be subject to any joint owner’s creditors and a joint owner may sell his or her interest in the property or withhold permission for a sale.

Let’s look at a couple basic situations…

Example 1: A and B are a married couple with a JWROS Deed.

This is the most common situation in which to have a JWROS deed. Both spouses own the house together and if one spouse passes away, the other spouse immediately has full ownership of the house without the house having to pass through probate. Problems may arise if;

  • One of the spouses has creditors who could attach liens to the house.
  • One of the spouses is ill and needs long term care or Medicaid
  • The couple divorces. Under Ohio law, even though the joint ownership remains, the survivorship interest will terminate.
  • The couple wants something else to happen to the property upon the death of a spouse, such as to pass to A’s children from a previous marriage reserving a life estate for B.

Example 2: A is a single person who lives alone. She has a JWROS deed with her friend C.

In this situation, presumably, A wants her friend C to have the house once she passes away, but wants to be able to live in the house with full control until she dies. By having a JWROS deed with her friend C, C has a current interest in the house, which means that;

  • If C gets a divorce, declares bankruptcy, or has creditor’s A’s house will be counted as part of C’s assets.
  • If A wants to move or refinance her house or take out an equity line, she will need to get C’s permission to do so.
  • If A gets mad at C and no longer wants her to inherit, she cannot change her estate plan to exclude C without C’s permission.
  • C has rights to live in the house if C wants to.
  • For tax purposes, C may not get the step up in basis of the house for capital gains that C would otherwise get if the property were passed in a different way on A’s death.
  • If C is on government welfare assistance, such as Medicaid or disability, having a share in A’s home may disqualify her from her benefits.


Example 3: A is a single person with three children, D, E, and F. She has a JWROS Deed with all three children.

A wants to leave her house to all three children and avoid probate. Doing so with a JWROS deed can be tricky for several reasons.

  • First of all, A is subject to all the issues she would be subject to in the previous hypothesis and chances of a problem occurring is multiplied by three.
  • Using a JWROS deed to transfer a house to multiple owners can make property management difficult.

–          If property is held by several individuals, all decisions have to be unanimous. If the property was instead is held in trust or probate, the trustee or executor could make the decisions without the approval of the beneficiaries.

–          Each individual must agree to help pay costs and expenses. In a trust or probate estate, other assets in the trust or estate may be used to pay the expenses of the property (taxes, condo fees, utilities, etc).

–          There is no court oversight to decide disputes.

  • Under a will or trust, if a beneficiary predeceases the grantor, his share can be passed to his children or a backup beneficiary. With a JWROS deed, once one member passes away his share is divided equally between the survivors.

–          Therefore if D passes away before A, when A passes away, E and F will inherit the house, and D’s children will receive nothing. If A had passed the property through a will, the property could be divided equally three ways, between E, F, and D’s children.

Example 4: A is a single person with three children, D, E, and F. She has a will or trust that lays out specifically what she would want to happen upon her death. She has a JWROS deed with only child E.

A’s will only governs property that passes through probate. Because a JWROS deed passes property outside of probate, the transaction is not governed by the will. If the will had the intent of leaving everything to be divided equally between the three children that will not happen with the JWROS deed. Instead, the house goes directly to the one child and the remainder of the estate, excluding the house, is divided between the children equally. So one child may receive a much larger share than A intended.

Similarly, a trust governs only property that is titled in the trust, and if the house is not held in the trust, it may change the entire estate plan. For people whose main goal is to avoid probate or leave assets to a disabled child, a trust may be the better solution compared to a JWROS deed.

While joint with right of survivorship deeds are very useful tools, they may not be appropriate for your personal estate plan. There is no one size fits all in estate planning, which is why you should consult with your attorney to find out how you can build an estate plan that is carefully tailored to meet your personal needs.


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