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How Should We Hold Title to Real Estate?

Options for Joint Ownership of Real Estate

When preparing a deed, we need to know how the new owners wish to hold title?

There are three ways for two (or more people) to hold title to real estate. They are “Tenants in Common (TIC), Joint Tenants with Rights of Survivorship (JWROS), Tenants By The Entireties (TBE). I see all to often that these are misstated on a deed as simply, “Joint Tenants.”This is not helpful and will cause more problems than it solves.All three of the examples above are “joint tenancies.”What we really want to know is which one?

Tenants in Common means that each owner holds and undivided interest in the whole property. This means that each party has the right to use and occupy the entire (undivided) property, and can transfer the ownership of, his or her ownership interest to a third party. When one of the joint owners dies, his or her interest will go to his or her heirs, usually by way of their Will.The deceased party’s share does NOT go the surviving joint tenant.At least not in the case of property held as Tenants in Common.

In contrast, owning assets or property jointly with rights of survivorship, each owns an undivided interest in the property during their lifetime, but upon his or her death, the deceased party’s share immediately and automatically goes to the surviving joint tenant.I often crudely say, “The one that lives the longest wins.”Thus, holding property as joint tenants with rights of survivorship is a technique often used to avoid probate.No matter what the Will says, the property will go to the survivor.In other words, the language of the deed trumps the Will.

Another important aspect of joint tenants with rights of survivorship is that the individual joint tenants cannot transfer their individual share without the consent and signature of the other.

So what about a husband and wife?If a husband and wife own real estate together, they are automatically joint tenants with rights of survivorship, but we call it “Joint Tenants by the Entireties.”It simply means the parties are married, and the spouse that survives gets the property upon the death of the other.This is the case whether or not the deed directly states that they are married to each other.

To avoid or circumvent this result for a married couple, the deed must say, “as Joint Tenants in Common.”Sometime we add, “and not as joint tenants with rights of survivorship.”

So, those are the three options available for two people to hold title, or own, real estate together.