With Benefit of Survivorship: What It is, How It Works, and Example

What Is With Benefit of Survivorship?

"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 legal hassles involved with estate settlements.

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.

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.

Example of With Benefit of Survivorship

If a married couple jointly owned a home with right of survivorship, then ownership of the entire home would automatically pass to the surviving spouse upon their partner’s death. 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 go according to the desires of all those expecting an inheritance.

The Bottom Line

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 any children or heirs. This arrangement allows ownership rights to pass without the usual hassle of estate settlements and probate.