Joint tenancy and tenancy in common are the two most common ways for two or more people to own property together in Arizona. They look alike on the surface. But they work very differently when one owner dies. Picking the wrong one can hurt an otherwise solid estate plan.
How Tenancy in Common Works
In a tenancy in common, each owner holds a separate share. Those shares do not have to be equal. One owner might hold 60% and another 40%. Each person has their own interest in the property.
When an owner dies, their share does not go to the other owners. Instead, it passes through their estate by will. If there is no will, state law decides who gets it. That share may need to go through probate before it reaches the right person.
Arizona defaults to tenancy in common. Under A.R.S. 33-431, any deed to two or more people creates a tenancy in common unless the deed says otherwise. The only exceptions are grants in trust, grants to executors, or grants to spouses.
This type of ownership is common among business partners, siblings who inherit property, or investors who want unequal shares.
How Joint Tenancy With Right of Survivorship Works
In a joint tenancy, each owner holds an equal share. The key feature is the right of survivorship. When one joint tenant dies, the surviving owner gets the other's share right away. No probate is needed. The surviving spouse or co-owner just files a sworn statement and a death certificate with the county recorder.
To create a joint tenancy with right of survivorship in Arizona, the deed must say so clearly. A deed that just names two owners without those words creates a tenancy in common by default. This is a common mistake that can lead to surprise probate cases.
Practical Differences That Matter
The choice between these two forms of ownership affects several areas:
- Probate: Joint tenancy skips probate on the deceased owner's share. Tenancy in common does not.
- Flexibility: Tenancy in common allows unequal shares. Joint tenancy requires equal shares.
- Control after death: With tenancy in common, each owner can leave their share to anyone. With joint tenancy, the share goes to the surviving owner.
- Creditor risk: Joint tenancy exposes the property to every owner's creditors. If one joint tenant faces a lawsuit, the property may be at risk.
When Each Type of Ownership Makes Sense
Joint tenancy works well for married couples who want the surviving spouse or co-owner to inherit right away. It skips probate on the first death. The transfer is simple. Many married couples in Arizona also look at community property with right of survivorship. This combines the auto-transfer with Arizona's community property tax perks. That includes the double step-up in basis.
Tenancy in common is a better fit for business partners, unrelated co-owners, or anyone who wants their share to go to someone other than the other owner. It also works when owners put in unequal amounts and want their shares to reflect that.
Review Your Property Title
The ownership type on the deed controls what happens to the property. It does not matter what a will says. For most Arizona families, the best move is to check how property is titled as part of a full estate plan. The form of ownership should match the overall plan, not work against it.
An experienced estate planning team can review deeds and explain the differences. They can make sure the title lines up with the family's goals. No surprises down the road.