With Benefit of Survivorship
Candlefocus EditorA survivorship agreement establishes a co-owners’ certain rights and obligations when one of the owners dies. This agreement is often used for real estate and other tangible property, such as an automobile or artwork and can be used to keep a family farm, small business, vacation home, or other property in the hands of family members without complications.
To qualify as a survivorship property, all co-owners must acquire the same title to the asset and maintain equal interests in the asset at all times. Voting shares and partner interests in a business may also qualify, while bank accounts and life insurance policies are often not eligible as they require designations in a will. The agreement between co-owners must be in writing and filed with the deed or title deed to the property.
Under a survivorship agreement, the passing of ownership is instant and does not require any action from the surviving owner. The new title appears on the deed, and the property is transferred immediately upon the death of the co-owner.
A survivorship agreement can be an effective way to transfer ownership, but it is important to note that the survivorship property can be a source of conflict among ownership. The new owner cannot control the use or disposition of the asset without the consent of the other owners. Additionally, if one of the co-owners is facing a significant financial or legal problem, their interest in the asset may be seized or otherwise affected, putting the asset at risk of transfer.
It is also important to note that survivorship agreements do not necessarily provide any tax benefit; state and federal laws may still apply. In some cases, the creation of a survivorship agreement may produce unforeseen tax liabilities. It is wise to consult a qualified tax professional before entering into an agreement.
In conclusion, with benefit of survivorship is a legal agreement between two or more people to hold title to a specific asset jointly upon the death of one of the co-owners. The co-owner who survives assumes full ownership of the property and is not subjected to the probate process, which can require lengthy and costly paperwork. Although this type of agreement provides a swift and simple solution for transferring ownership, it is essential to understand the full implications of the agreement before entering into it. As with most legal matters, consulting with a qualified attorney is the safest course for sorting out the complexities of what with benefit of survivorship means.