Do you know how your jointly-held real estate is titled? I think if I surveyed 100 clients, 90 of them would have no idea. It is not uncommon that someone wouldn’t know the answer to the question, especially if they have not used an attorney in a real estate transaction before. I can’t tell you how many times a client didn’t know that there was more than one way to hold title to jointly owned real estate. Mostly, an option is never presented if an attorney is not handling the transaction.
If you own property with a spouse, real estate is typically owned as “survivorship marital property”. This means that when one spouse dies, title passes to the survivor. A simple form would be filed with the register of deeds in the county where the land is located to remove the decedent from the title. This is fairly standard and obvious, and not really the point of this article. The issues that occur in joint ownership occur when the owners are not married.
If you own real estate with a non-spouse, there are two ways in which property is typically held. One is as “Tenants-in-Common”. If two owners have own real estate as Tenants-in-Common, each owns an undivided one-half interest in the property. When Owner A dies, his/her one-half interest will pass pursuant to his/her wishes (typically via will or intestacy). The surviving owner, Owner B, will continue to own his/her one-half interest with the new owners owning the other one-half.
The second common way jointly owned real estate is typically held is “Joint Tenancy”. Here, if there are two owners that hold property as joint tenants, when Owner A dies, his/her interest will pass to Owner B. This is accomplished exactly like the survivorship marital property example above.
There are positives and negatives to these forms of ownership, and I have not addressed the majority of them in this post. Be certain that you have a plan if you decide to purchase real estate with another person, especially if that person isn’t your spouse. You need to know the consequences of your form ownership before it is too late.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
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