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JTWROS Versus JT TEN: Understanding the Difference

Estate 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.

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.” 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.

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 the 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.

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.

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.

You should keep JTWROS and JT TEN 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. For more help understanding these fine details, please contact us today.

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About the Independent Financial Advisor

Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.

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