From a legal standpoint, a valid joint tenancy is not a transfer at death at all, but rather the result of a lifetime transfer that vests (or becomes) the property of the succeeding survivor by operation of law. In other words, the property really already belonged to the survivor, subject only to the claim of the other joint tenant. The property, therefore, is not inherited because it is already owned. When a joint tenant dies, his interest and any claim he might have held in the joint property disappears, so the property �which already belonged to the survivor subject to the claim of the deceased �is now the survivor's free and clear of any claim. This transfer of ownership is said to take place automatically by operation of law and therefore needs no outside action or verification by probate courts, lawyers, deeds, or the like. It can be quite a smooth transition from one tenant to another, assuming, of course, that there are no objections. Unfortunately, where money and emotions are concerned, this is hardly always the case. The fact of the matter is that joint tenancies suffer as many challenges inside the courts as they enjoy popularity outside because the creators of the joint tenancies treat them in such an arbitrary fashion. This, in turn, makes them quite vulnerable to attack.

Using joint tenancies to avoid probate can be quite risky. They not only invite litigation when there's even the slightest question of the deceased's intent, but (depending on the size of the estate) they can also produce extra taxes and administrative (probate) fees �the very things that it was hoped the joint ownership would avoid. For example, it's quite possible (and not at all uncommon) that a disgruntled heir or an aggressive executor can take the position that the jointly held property should be probated because it was not a 'true' joint tenancy.

Another risk of joint tenancy is the simultaneous death of the joint owners. Basically, such an occurrence would have the effect of converting the joint tenancy into a tenancy in common. This would result in one-half of the property passing through the probate estate of each joint tenant, bringing about extra fees, delays and taxes, unless the will or trust of one of the joint tenants contained a provision dealing with simultaneous death.

3. Living Trust

Simply stated, a living trust is a trust created during your lifetime that usually provides for the disposition of assets that are contained in the trust at the time of your death. For instance, you could structure your living trust to pay out all income to you during your lifetime and, upon your death, whatever is left in the trust would transfer to your spouse. Since there has been a lifetime transfer of the property to the trust, and since the trust provides what is to be done with the property upon your death, there would be no need for the probate court to be involved in the transfer of those assets after you move on. For a more in-depth discussion of this topic, please read the article Living Trusts.