When it comes to owning property with someone else, there are different types of arrangements that can be made. Two common ways of co-owning property are Joint Tenancy with Rights of Survivorship and Tenancy in Common. Understanding the differences between these two forms of ownership is crucial to ensure your property is structured in a way that aligns with your future plans. Let’s delve into the key distinctions:
1. Legal Definition:
Joint Tenancy with Rights of Survivorship: In this arrangement, two or more individuals hold equal shares of the property, and if one owner passes away, their share automatically transfers to the surviving owner(s).
Tenancy in Common: Here, co-owners each own a specific share of the property, which may or may not be equal. If one owner dies, their share forms part of their estate and can be passed on to their heirs.
2. Survivorship Feature:
Joint Tenancy with Rights of Survivorship: This form of co-ownership includes the "right of survivorship," meaning that if one owner dies, their share is equally distributed among the remaining co-owners. This feature avoids the property going through probate.
Tenancy in Common: In this arrangement, the deceased owner's share is not automatically transferred to the surviving owners. Instead, it becomes part of their estate, and its distribution is determined by their will or intestacy laws.
3. Ownership Shares:
Joint Tenancy with Rights of Survivorship: All owners in this type of agreement hold an equal share of the property. Each owner has an undivided interest in the whole property.
Tenancy in Common: Co-owners can hold unequal shares in the property, and their ownership interest is divided by percentages. This allows for more flexibility in determining who owns what portion of the property.
4. Exit Strategy:
Joint Tenancy with Rights of Survivorship: Exiting this type of co-ownership can be complex, as all owners need to agree on any changes. Selling a share of the property may require the consent of all owners.
Tenancy in Common: Co-owners have more freedom to sell or transfer their individual share of the property without needing approval from other owners. This provides more flexibility in managing the property.
5. Estate Planning Implications:
Joint Tenancy with Rights of Survivorship: This form of co-ownership is beneficial for avoiding probate and ensuring a smooth transfer of property rights to the surviving owners. However, it may not align with specific estate planning objectives.
Tenancy in Common: For individuals looking to have more control over how their share of the property is distributed after death, tenancy in common allows for specific instructions through a will or trust.
Whether you opt for Joint Tenancy with Rights of Survivorship or Tenancy in Common depends on various factors, including your relationship with co-owners, estate planning goals, and ownership preferences. Consulting with Kamenetsky Law can help you make an informed decision based on your unique circumstances.
Understanding the nuances between these two forms of property ownership empowers you to make the right choice that aligns with your long-term plans. From survivorship rights to ownership flexibility, each option presents distinct advantages and considerations. When it comes to co-owning property, clarity and foresight are key elements in creating a harmonious and secure ownership structure.
Disclaimer — This content is for general information only. The information contained herein is not legal advice for any specific matter, nor does it create an attorney-client relationship. Laws vary from one state to another. For legal advice, consult an attorney.
Comments