“With benefit of survivorship” refers to a legal agreement where property co-owners automatically receive full ownership when another co-owner dies. This process avoids the legal hassles involved with estate settlements.
Key Takeaways
- Simplifies Property Transfer: With benefit of survivorship is a legal agreement between co-owners of a property, where the surviving owner(s) share full ownership of the property if the other dies.
- Bypasses Probate: It skips the probate process that usually conveys an estate’s assets to survivors, saving time and avoiding complications.
- Equal Ownership: A key requirement is that all co-owners must acquire the same title on the asset at the same time and control an equal share.
Understanding With Benefit of Survivorship
With benefit of survivorship typically describes a form of joint tenancy ownership where, when one owner dies, the assets automatically pass to one or more surviving members of the agreement. Such agreements are often termed “joint tenants with right of survivorship,” and they commonly occur when two or more people own big-ticket items such as real estate, business entities, or investment accounts.
Joint tenancy with benefit of survivorship bypasses the probate process that otherwise applies when conveying an estate’s assets to survivors.
Joint Tenancy and Tenancy in Common
Survivorship benefits form the basis of most decisions to enter into joint tenancy. Common law requires distinct circumstances to recognize a joint tenancy agreement: all co-owners must acquire the same title on the asset at the same time, and all owners must control an equal share of the asset. All owners must also have equal rights to possess the asset. Agreements that lack any of these requirements would fail to qualify as joint tenancy.
Tenancy in common (TIC) agreements offer an option for co-ownership of assets without benefit of survivorship. Tenancy in common agreements cover all co-ownership situations that fail to meet the necessary criteria for joint tenancy as well as situations in which one or more of the co-owners desire to pass their ownership interest to another individual in the event of their death. Assets inherited from tenancy in common agreements do not avoid the probate process in the way that assets automatically passed to survivors in a joint tenancy do, however.
Joint ownership with benefit of survivorship is common in family and marital properties. Without this arrangement, the ownership of a deceased’s share of the asset would pass through probate with potentially unexpected consequences.
Other Agreements With Survivor Beneficiaries
Other elements of estate planning also involve the passage of survivor benefits. Specifically, life insurance plans, retirement plans, annuities, and Social Security benefits can automatically pass to another individual when the covered person dies. In addition to the basic passage of such assets through a named beneficiary, some insurance policies and annuities offer riders that allow the insurance policy or annuity itself to pass to a specified survivor after the primary insured or annuitant dies. Examples include variable survivorship life insurance and joint and survivor annuities.
Real-Life Example
Imagine a married couple jointly owned a home with the benefit of survivorship. Upon one spouse’s death, ownership of the entire home would automatically pass to the surviving spouse. Without such an agreement and in the absence of other estate-planning options such as trusts, the home would go through the probate process, which takes time and may not always align with the desires of all involved parties expecting an inheritance.
Survivorship vs. Beneficiary
In retirement planning, a survivor is someone (usually a spouse) who continues to receive your benefits after you die, while a beneficiary is someone who receives any remaining account balance after you die. The difference is that survivorship benefits are paid out for the lifetime of the survivor, while beneficiaries simply receive the remaining account balance.
Duration of Survivorship Benefits
If eligible to collect social security benefits, your spouse or surviving children may qualify for survivorship benefits. These benefits may also be available to dependent parents, surviving stepchildren, grandchildren, and disabled older children, depending on their relationship to the deceased. Surviving spouses receive these benefits for the remainder of their lives or to surviving children until they reach 19. Adult children can also qualify if they were disabled by an injury before age 22.
Amounts of Survivorship Benefits
The amount of survivorship benefits depends on the lifetime earnings of the deceased. Surviving spouses at retirement age typically earn around 100% of the benefits that the deceased would have earned. Surviving spouses who have not reached retirement age, surviving children, and surviving dependent parents typically receive 75-82% of the deceased’s benefits.
Conclusion
With Benefit of Survivorship is a legal arrangement that allows shared ownership of a property or asset between a small group of people. When one of the co-owners dies, their share automatically passes to the other surviving owners, rather than to heirs through probate. This ensures ownership rights can be transferred seamlessly, avoiding the usual delays and potential disputes of estate settlements.
Related Terms: probate, tenancy in common, estate settlement, life insurance, trusts.
References
- Washington Department of Retirement Systems. “Beneficiary vs. Survivor”.
- Northwestern Mutual. “How Social Security Survivor Benefits Work”.
