Understanding The Types Of Joint Property Ownership
When you buy property, the property may not just be yours. The title may also include names of others such as family members, friends, or business partners. Know that the way in which a real estate owned by multiple people is titled can have significant legal consequences.
When it comes to how property is owned by multiple people, there is no good or bad way; it is just a matter of understanding the legalities of each and deciding whether any particular method works for you.
Joint Tenants and Survivorship
You will often hear of people who own property as joint tenants, often with what is called a “right of survivorship.” This is where two people own property, and they are both owners of an equal share (50%) of the property.
One benefit of this kind of ownership is that when one owner dies, the other then automatically becomes the sole owner of the entire property. This can allow for a quick and easy property transfer, often avoiding the need to probate the property, as the title automatically, and by operation of law, passes.
To get a joint tenancy, the title to the property must say that, and it must specifically state that the owners are joint tenants with a right of survivorship.
Breaking the Tenancy
Note that just because parties that co-own property are joint tenants doesn’t mean that the joint tenancy can’t be broken—it can. One of the tenants who transfers his or her interest to someone else can then break the joint tenancy.
At that point, the parties (the old owner and the new owner, who just bought or took over the other half of the property) will simply be what are known as “tenants in common.”
Tenancy in Common
Tenancy in common (TIC) is the same as joint tenancy, except with one major difference: When one owner dies, the property does not automatically transfer to the other owner. Rather, the deceased’s interest in the property becomes part of the deceased’s estate and passes the way any other property would, through the probate process (based on the deceased’s will, estate documents, or intestate laws).
Tenancies by the Entirety
When a married couple acquires any property (not just real estate), and they acquire it at the same time, and while married, the property becomes what is known as “tenancy by the entirety.” As with joint tenants, upon the passing of one spouse, the interest of that spouse will automatically, outside of probate, transfer to the other spouse.
Another benefit to a tenancy by the entirety is that there are a lot of asset protection benefits. Tenancy by the entirety property cannot be collected by any creditors to satisfy the debts of any one spouse–even if one spouse files for bankruptcy.
Questions about buying or owning property, or about the closing process? Contact the Tampa real estate lawyers at the Gilbert Garcia Group, P.A. today.