A couple I advised recently moved to Manhattan from California. After selling their business, they bought a brownstone in Brooklyn and titled it as “joint tenants with right of survivorship,” assuming it was standard procedure. They didn’t realize that single line on the deed fundamentally changed how the property would be treated at death or divorce. It undid years of planning built for a completely different legal system.
This mistake is common. The legal title on your property is not administrative paperwork—it is an active part of your estate plan. For New Yorkers with ties to other states, the distinction between joint tenancy and community property is not academic. It has direct financial consequences.
How New York Law Views Jointly Owned Property
New York is an equitable distribution state, not a community property state. For married couples, the most common form of joint ownership is “tenancy by the entirety,” which is similar to joint tenancy but reserved for spouses. For unmarried co-owners—business partners, a parent and child, siblings—the form is “joint tenancy with right of survivorship.”
Both structures share a defining feature: the automatic right of survivorship. When one owner dies, their share of the property automatically transfers to the surviving owner. It does not pass through the deceased’s will, and it is not subject to the probate process in Surrogate’s Court. The asset is transferred by operation of law.
This can be an efficient way to transfer a primary residence. However, it can create unintended consequences. If a widow adds her adult son to her deed as a joint tenant for convenience, that home is no longer controlled by her will. Upon her death, the home belongs entirely to that son, regardless of whether her will stated it should be split among all three of her children. The deed supersedes the will.
New York Estates, Powers and Trusts Law (EPTL) § 6-2.2 is specific. A transfer to two or more people creates a “tenancy in common”—where each person’s share passes through their will—unless the deed expressly declares a “joint tenancy.” That language creates the right of survivorship. Stewardship requires being intentional about these declarations.
The Community Property Complication
Community property is a system of ownership used in nine states—including California, Texas, and Arizona—where most property acquired by a couple during their marriage is considered owned 50/50 by both spouses. This is true regardless of whose name is on the title.
Unlike joint tenancy, there is no automatic right of survivorship. Each spouse has the right to leave their 50% share to whomever they wish in their will. A husband in Texas could leave his half of the marital home to his brother, not his wife. This provides flexibility but also introduces uncertainty if not planned for deliberately.
This matters for New Yorkers in two primary situations:
- You moved here from a community property state. The character of the assets you acquired while living there does not disappear when you cross the state line. Assets that were community property may retain that status, which has significant implications for divorce or estate distribution in New York.
- You own property in a community property state. If you live in New York but own a vacation home in Arizona, that property is subject to Arizona’s community property laws, not New York’s equitable distribution rules.
Ignoring this can create serious conflicts between your will and the property laws of different states, leading to expensive legal battles for your family.
Titling, Taxes, and Your Legacy
The distinction also has major tax consequences, particularly regarding the “step-up in basis.” When you inherit an asset, its cost basis is “stepped up” to its fair market value at the time of death. This minimizes the capital gains tax if you later sell it.
With joint tenancy property, only the deceased owner’s share gets this step-up. If a couple bought a property for $200,000 that is now worth $1 million, and one spouse dies, the survivor’s new basis would be $600,000—their original $100,000 half plus the stepped-up $500,000 half they inherited.
With community property, the entire value of the property gets a step-up to the fair market value, including the surviving spouse’s share. In the same example, the survivor’s new basis would be the full $1 million. This is a significant tax advantage often lost when couples from community property states move to New York and retitle their assets as joint tenants without proper counsel.
How an asset is titled is not a minor detail. It dictates control, inheritance, and tax treatment. When used correctly, it ensures your intentions are honored. When overlooked, it can undermine your entire legacy.
If you have moved to New York from a community property state or own property across state lines, your asset titles may conflict with your will. The first step is to review the deed for every piece of real estate and the title for every major account. This audit identifies where state law may override your stated intentions, allowing you to correct the documents before a crisis forces the issue in Surrogate’s Court.
