For most of us, buying a home is usually the most significant purchase we will ever make. For that reason, understanding how the property should be titled is certainly important.
There are several different types of joint estates or co-ownership of property, including joint tenancy, tenancy in common, and tenancy by the entirety. If a couple purchasing a home is unmarried, they have the option of taking title as joint tenants or tenants in common. If the couple is married, they have the additional choice of tenancy by the entirety. These forms of co-ownership not only apply to real estate, but other property as well, such as bank accounts, automobiles, and savings bonds.
Tenancy in Common
For most of us, buying a home is usually the most significant purchase we will ever make. For that reason, understanding how the property should be titled is certainly important. There are several different types of joint estates or co-ownership of property, including joint tenancy, tenancy in common, and tenancy by the entirety. If a couple purchasing a home is unmarried, they have the option of taking title as joint tenants or tenants in common. If the couple is married, they have the additional choice of tenancy by the entirety. These forms of co-ownership not only apply to real estate, but other property as well, such as bank accounts, automobiles, and savings bonds. Tenancy in Common Tenancy in common is an estate in which each owner (tenant) has a right to the entire property, but not a right to sole possession. If title is conveyed to two unmarried persons, without language providing otherwise, it is presumed to be tenancy in common. The interests in the property are presumed to be equal unless proven to the contrary. However, where the couple is married, unless the proper language is specified in the deed, tenancy in common is not presumed, but rather tenancy by the entirety. Upon the death of either tenant, his or her share passes to his or her heirs, not to the other tenant. Joint Tenancy Joint tenancy is distinguished from tenancy in common by the concept of “survivorship.” This means that when one joint owner dies, the surviving owner becomes the sole owner of the entire property, free from the claims of creditors and heirs of the deceased tenant. It also means that the property will not pass through the decedent’s will, but simply vests in the surviving co-owner. Tenancy by the Entirety Tenancy by the entirety is an estate in which property acquired after marriage is held jointly by husband and wife. For example, household goods and furnishings acquired during marriage are presumed to be held as tenants by the entirety. Each spouse owns the whole, shares possession and, like joint tenancy, has the right of survivorship. The difference between tenancy by the entirety and joint tenancy is that the right of survivorship cannot be destroyed by a conveyance by one spouse to a third party nor by an involuntary transfer of the property interest of one of the spouses. Another benefit of tenancy by the entirety is that the joint property cannot be reached by the individual creditors of either spouse. In other words, a creditor who obtains a judgment against only one spouse cannot levy upon the property held in a tenancy by the entirety. Generally, only where both spouses have subjected the property to the judgment will the creditor be able to obtain a lien upon the property. While there are numerous benefits to this form of co-ownership, it may not be always be the most beneficial form of title in all cases. Sometimes, for estate planning reasons, spouses may choose not to have a right of survivorship so that their interests in the property will pass through their wills. First-time home buyers, who often do not have an attorney representing their interests, are sometimes given general information about the different forms of title by their real estate broker. However, the broker may not be able to advise them of the benefits/drawbacks of each form of title with respect to their particular situation. The broker is not in the business of providing estate planning, tax, family law or other legal advice, nor should he or she be expected to do so. Yet all of these issues may come into play when deciding a form of title. Give us a call if we can be of assistance in this area. Tenancy in common is an estate in which each owner (tenant) has a right to the entire property, but not a right to sole possession. If title is conveyed to two unmarried persons, without language providing otherwise, it is presumed to be tenancy in common. The interests in the property are presumed to be equal unless proven to the contrary. However, where the couple is married, unless the proper language is specified in the deed, tenancy in common is not presumed, but rather tenancy by the entirety. Upon the death of either tenant, his or her share passes to his or her heirs, not to the other tenant.
Joint Tenancy
Joint tenancy is distinguished from tenancy in common by the concept of “survivorship.” This means that when one joint owner dies, the surviving owner becomes the sole owner of the entire property, free from the claims of creditors and heirs of the deceased tenant. It also means that the property will not pass through the decedent’s will, but simply vests in the surviving co-owner.
Tenancy by the Entirety
Tenancy by the entirety is an estate in which property acquired after marriage is held jointly by husband and wife. For example, household goods and furnishings acquired during marriage are presumed to be held as tenants by the entirety. Each spouse owns the whole, shares possession and, like joint tenancy, has the right of survivorship. The difference between tenancy by the entirety and joint tenancy is that the right of survivorship cannot be destroyed by a conveyance by one spouse to a third party nor by an involuntary transfer of the property interest of one of the spouses.
Another benefit of tenancy by the entirety is that the joint property cannot be reached by the individual creditors of either spouse. In other words, a creditor who obtains a judgment against only one spouse cannot levy upon the property held in a tenancy by the entirety. Generally, only where both spouses have subjected the property to the judgment will the creditor be able to obtain a lien upon the property.
While there are numerous benefits to this form of co-ownership, it may not be always be the most beneficial form of title in all cases. Sometimes, for estate planning reasons, spouses may choose not to have a right of survivorship so that their interests in the property will pass through their wills.
First-time home buyers, who often do not have an attorney representing their interests, are sometimes given general information about the different forms of title by their real estate broker. However, the broker may not be able to advise them of the benefits/drawbacks of each form of title with respect to their particular situation. The broker is not in the business of providing estate planning, tax, family law or other legal advice, nor should he or she be expected to do so. Yet all of these issues may come into play when deciding a form of title.
Give us a call if we can be of assistance in this area.
— Denise Ciampitti