A couple I recently worked with moved to Manhattan from California. During the closing on their first co-op, they became confused. Friends back west spoke of holding property as “community property with right of survivorship.” Their New York attorney, however, presented different options: “joint tenants with right of survivorship” or “tenants by the entirety.” The language seemed similar, but the underlying law—and the consequences for their family—are profoundly different.
This is a common friction point for families moving to New York. How you own property here is fundamentally different from community property states like California, Texas, or Arizona. Getting this wrong is not just a paperwork mistake; it can redirect the future of an asset you worked a lifetime to acquire.
New York is a Common Law State
New York is a common law state, not a community property state. The concept of “community property”—where most assets acquired during a marriage are considered equally owned by both spouses—does not exist in our statutes. Here, ownership follows title. If your name is on the deed or account, it is legally yours. If your spouse’s name is on it, it is theirs. Assets are divided upon divorce only through equitable distribution—a court’s determination of what is fair, not an automatic 50/50 split.
The ownership structure “community property with right of survivorship” is therefore not available in New York. While it offers certain tax advantages in other states—particularly a “double step-up” in basis for capital gains tax on the death of a spouse—it is not an option here. Instead, New York law gives married couples two forms of co-ownership that achieve the goal of bypassing probate, but with different tax and liability implications.
How New York Couples Can Hold Property
Married couples in New York primarily use two forms of co-ownership: Joint Tenancy with Right of Survivorship (JTWROS) and Tenancy by the Entirety. Both ensure that when one owner dies, their share passes automatically to the surviving owner. The asset does not enter the deceased’s estate and avoids the delays and costs of Surrogate’s Court.
Tenancy by the Entirety is a form of ownership available only to married couples. For real estate, it is created automatically when a married couple takes title together, unless the deed specifies otherwise. Its primary advantage is creditor protection. A creditor of only one spouse cannot force the sale of the property to satisfy a debt. Neither spouse can sell their interest or alter the ownership without the other’s consent. This provides a layer of asset protection that JTWROS does not.
Joint Tenancy with Right of Survivorship can be used by any two or more people, married or not. It must be created with specific language. Under New York’s Estates, Powers and Trusts Law (EPTL) § 6-2.2, a transfer of property to two or more people is presumed to create a “tenancy in common” unless the instrument expressly declares a joint tenancy. A tenancy in common has no right of survivorship—each owner’s share passes to their heirs through their will and probate. Deliberate language on a deed is critical.
The Long-Term Implications of Your Deed
Choosing how to title property is not an administrative detail; it is an act of stewardship. The words on that deed dictate who receives the asset, whether it must pass through court, and how much protection it has from creditors.
The tax basis step-up, for example, works differently here. With JTWROS property, only the deceased owner’s half receives a step-up in basis to its fair market value at the time of death. The survivor’s original basis on their half remains unchanged. This can create significant capital gains tax consequences if the surviving spouse later sells the property—a detail we review when structuring every client’s estate.
The wrong choice can unravel an otherwise well-made plan. I have seen cases where a couple assumed they owned their home with survivorship rights, only for the surviving spouse to discover the deed was drafted as a tenancy in common. Suddenly, half the family home was tied up in probate, subject to the claims of estate creditors and potentially passing to unintended beneficiaries under an old will.
How your name appears on a deed is one of the most powerful—and often overlooked—aspects of your legacy plan. It deserves careful consideration.
A prudent first step is to review the deeds for your real estate and the titling of your non-retirement investment accounts. We can then schedule a session to analyze these documents and confirm your ownership structures align with your family’s long-term objectives.
