A couple I met recently moved to Manhattan from Texas. They bought a pre-war apartment on the Upper West Side and, on their real estate agent’s advice, took title as “joint tenants with right of survivorship.” They assumed this was standard for married couples. What they didn’t realize is that this simple designation on a deed can have massive consequences, particularly for their children from prior marriages. Their assumption, rooted in Texas’s community property laws, was dangerously out of place in New York.
I see this story frequently. New York is not a community property state. This is a critical distinction that impacts everything from divorce to estate planning. Understanding how our state treats property ownership is the first step toward building a legacy that is deliberate, not accidental.
How New York Law Views Co-Owned Property
Instead of the community property system—where most assets acquired during a marriage are considered owned 50/50—New York operates under “equitable distribution.” This framework applies primarily during a divorce, but its principles of ownership are fundamental to estate planning.
When you own property with another person in New York, the law presumes you own it as “tenants in common” unless the deed specifies otherwise. As tenants in common, each owner holds a distinct, separate share. You can sell, mortgage, or will your share to whomever you choose. Upon your death, your portion of the property becomes part of your estate and is distributed according to your will or, lacking a will, state intestacy laws.
The alternative, and the one that causes the most confusion, is “joint tenancy with right of survivorship” (JTWROS). This is a very different arrangement. Its defining feature is the “right of survivorship”—when one joint tenant dies, their ownership interest is automatically extinguished. The surviving joint tenant instantly becomes the owner of the entire property. The asset completely bypasses the deceased owner’s will and the probate process in Surrogate’s Court.
The Double-Edged Sword of Joint Tenancy
At first glance, avoiding probate sounds like a clear advantage. In some straightforward situations, it can be. For a married couple with no other heirs who want their spouse to inherit everything without delay, joint tenancy on a home or bank account can be an effective tool.
But this automatic transfer is a blunt instrument. It operates outside of your estate plan, and that can create profound problems. Let’s return to the couple from Texas. The husband has two children from his first marriage. His will carefully states that his half of the Manhattan apartment should be placed in a trust for their benefit. Because the deed lists him and his new wife as joint tenants, the will is irrelevant for this asset. The moment he passes away, his wife becomes the 100% owner of the apartment. His children get nothing. The deed overrides the will.
New York’s Estates, Powers and Trusts Law (EPTL) § 6-2.2(a) codifies this structure. It states that a disposition of property to two or more persons creates a tenancy in common, unless it is expressly declared to be a joint tenancy. That “express declaration” on a deed is legally binding and can unintentionally disinherit the people you most want to protect.
Tax Consequences and Loss of Control
The issues with joint tenancy extend beyond inheritance. There are significant tax implications, particularly concerning 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 capital gains tax if you later sell the asset.
In community property states, when one spouse dies, the entire value of the community property gets a step-up in basis. In New York, with a JTWROS property, only the deceased owner’s half receives the step-up. If our couple bought their apartment for $1 million and it’s worth $3 million when the husband dies, the wife’s new basis is not $3 million. It’s $2 million—her original $500,000 half plus the stepped-up $1.5 million half she inherited. This difference could lead to a substantially higher tax bill when she eventually sells.
Stewardship is about intentionality. Joint tenancy can be a useful tool, but it’s often chosen as a default without full consideration of its power to override a will, create tax inefficiencies, and expose an asset to the surviving owner’s creditors. It sacrifices control for a convenience that may not be worth the price.
The way your property is titled is not just administrative paperwork; it is a core component of your legacy. It dictates who receives your most valuable assets and can either support or completely undermine the objectives of your will and trust. If you own property jointly or have moved to New York from a community property state, we should perform a Deed and Titling Review. This process ensures the legal ownership of your assets aligns with your intentions for your family’s future.
