Right of Survivorship: The ins and outs

Question:I read your recent article, “Arizona Recognizes Wills from Canada.” You recommended that generally a husband and wife should own their home as community property with right of survivorship. The deed to our Chandler home, however, says joint tenants with right of survivorship. What is the difference?

Answer: Since 1995, a husband and wife in Arizona can hold title to a home or other real property as community property with right of survivorship, or CPWROS. Two or more individuals, including a husband and wife, can hold title to a home or other real property as joint tenants with right of survivorship, or  JTWROS.

Both CPWROS and JTWROS provide that, upon death, there is no probate of the deceased’s interest in the home, and that the deceased’s interest in the home will transfer to the survivor, or survivors if more than two individuals hold title as JTWROS. For a married couple, CPWROS can have an income-tax advantage over JTWROS when, after the death of the first spouse, the home is sold for a profit by the surviving spouse.

A husband and wife should own their home as CPWROS rather than JTWROS, unless there are children from a prior marriage. A husband and wife then may want to change “right of survivorship” if they want those children from a prior marriage, and not the surviving spouse, to have their interest in the home after their death. In that event, a husband and wife should take title simply as “husband and wife,” or “community property,” and provide in their wills that they want their children to own their interest in the home after their death.