Estate Planning Basics

End of Life Management Toolkit #6 | by Team Passare and Robert L. Shepard

6. Property with Multiple Owners

There are different ways that people can hold ownership together. For real property, this is determined by language in the deed conveying title to the property. For tangible property, it depends on how the account or certificate is titled.

Tenancy in Common

Tenancy in Common is the default way for two or more unmarried people to concurrently own real property. Each co-owner has an undivided interest in property. When one tenant in common co-owner dies, his interest does not pass automatically to the surviving co-owner. Rather, it is probate property and passes to the beneficiary through the probate court under the terms of the will.

Tenancy by Entireties

This is a special method of joint ownership for spouses in which the surviving spouse automatically owns the entire interest in the property at the death of the first spouse.

Joint Tenancy with Right of Survivorship.
  • When two or more people hold title to property as joint tenants with right of survivorship, each co-owner has an undivided interest in the property.
  • At the death of the first joint tenant, the surviving individual automatically takes full title to the property.
  • Many banks define all joint accounts as being owned this way.
  • With regard to real property, the instrument creating the joint tenancy must specify that each co-owner will own the property with right of survivorship.

For tenancy by the entirety and joint tenancy, the surviving tenant becomes the sole owner of the property without the need for any probate proceedings. However, to document the passing of title to real property upon the death of a joint tenant, there are filing requirements with the probate court of the county in which the real property is located. Also, the property may be subject to the rights of creditors holding unsatisfied debts of the deceased joint tenant (including state and federal taxing authorities).

Holding property jointly with survivorship rights can be a helpful form of estate planning, especially for smaller estates (where the total combined value of the husband’s and wife’s estates is under the single estate tax exclusion amount). It may also ease the administrative burdens of the death of a non-resident co-owner by minimizing the need for estate administration.

TIP: For small estates, a married couple should consider holding all property as joint tenants with rights of survivorship. At a minimum, keeping at least one bank account with this method of ownership can provide an instantly available source of funds to pay medical, funeral, or other emergency expenses. The amount that should be available to cover such expenses depends on each individual’s lifestyle and projected needs.

Now, take a few minutes to answer these questions.
  1. Do you have property under Tenancy in Common Co-ownership? If so, what are they?
  2. What are the advantages of a Tenancy by Entireties? Would this type of ownership benefit you and your particular situation?
  3. What are the advantages of a Joint Tenancy with Right of Survivorship agreement? Would this type of ownership benefit you and your particular situation?
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