In the estate planning context, the most important implication of owning property in joint tenancy with another person is the fact that the surviving joint tenant will automatically inherit the interest of the first deceased tenant, irrespective of any last will or trust agreement of the first deceased tenant. For this reason, part of the estate planning process is a careful evaluation of how property is owned and often a change of ownership from joint tenancy to ownership by a trust.
It is very common for spouses to own their personal residence in joint tenancy unless they have completed an estate plan that includes the execution and funding of a trust. Importantly, joint tenancy ownership can be presumed even if the vesting deed for the residence does not specify joint tenancy ownership. For many years in Utah, "an ownership interest in real estate granted to two persons in their own right who are designated as spouses in the granting documents is presumed to be a joint tenancy interest with rights of survivorship..." Utah Code 57-1-5(a)(1)(i).
However, pursuant to H.B. 37 (2024), an ownership interest granted on or after May 1, 2024 to two or more persons in their own right is presumed to be joint tenancy even without the designation as spouses. This will have the benefit of avoiding the need to probate the estate of a first deceased spouse who owns their home or other real estate with the surviving spouse but without any reference to the marriage or joint tenancy on the deed.
On the other hand, this new law could create a problem where business partners take title to an investment property in their individual names without specifying their respective ownership interests in the property. It is unusual for a business partner to be the intended heir of another business partner's assets, but H.B. 37 would create exactly this result if the deed only lists the individuals' names and does not specify that ownership is to be as "tenants in common" or make a similar distinction. The obvious solution is to always specify what kind of tenancy is intended when taking title to real estate, and H.B. 37 makes this even more important for many co-owners of property.
It is very common for spouses to own their personal residence in joint tenancy unless they have completed an estate plan that includes the execution and funding of a trust. Importantly, joint tenancy ownership can be presumed even if the vesting deed for the residence does not specify joint tenancy ownership. For many years in Utah, "an ownership interest in real estate granted to two persons in their own right who are designated as spouses in the granting documents is presumed to be a joint tenancy interest with rights of survivorship..." Utah Code 57-1-5(a)(1)(i).
However, pursuant to H.B. 37 (2024), an ownership interest granted on or after May 1, 2024 to two or more persons in their own right is presumed to be joint tenancy even without the designation as spouses. This will have the benefit of avoiding the need to probate the estate of a first deceased spouse who owns their home or other real estate with the surviving spouse but without any reference to the marriage or joint tenancy on the deed.
On the other hand, this new law could create a problem where business partners take title to an investment property in their individual names without specifying their respective ownership interests in the property. It is unusual for a business partner to be the intended heir of another business partner's assets, but H.B. 37 would create exactly this result if the deed only lists the individuals' names and does not specify that ownership is to be as "tenants in common" or make a similar distinction. The obvious solution is to always specify what kind of tenancy is intended when taking title to real estate, and H.B. 37 makes this even more important for many co-owners of property.
