Joint Ownership and the Consequences

When two or more people acquire title in real or personal property (other than in an entity such as a corporation, partnership, or limited liability company), they too often give little thought to the type of ownership.  The consequences can be dire.
There are three types of joint ownership: tenancy by the entireties where the parties are spouses (with survivorship); tenancy in common (without survivorship); and joint tenancy (with survivorship).  “Survivorship” simply means that if one of the co-owners dies, the surviving party (or parties if more than two) becomes the owner outright of the property; correspondingly, if one owner dies without survivorship, his or her interest passes not to the co-owner but to his or her estate.
Very often (too often!) the intention of the parties when they acquire an asset is not clearly expressed.  In Pennsylvania, if the parties are married, unless they manifest a contrary intent, they become tenants by the entireties, and if one dies, the other owns the entire asset.  Another rule in Pennsylvania is that where unmarried parties acquire an asset jointly, and there is no manifestation of intent to the contrary, the (rebuttable) presumption is that they intended to own it as tenants in common; and if one dies, his or her undivided one-half (if there are two) interest passes not to the surviving co-owner but to the estate of the decedent.  In that case, the surviving co-owner may suddenly have several co-owners he or she never dreamt of (as opposed to owning the asset alone if it had been a joint tenancy); often this can severely alter the plans of the surviving co-owner for the development of a property.
A further complicating factor is often the total lack of documentation.  With real estate, there is almost always a deed at least, but often it will identify the grantees as “A and B” with nothing more; in that case A and B are tenants in common.  The same rules apply to personal property.
Our financial institutions have often contributed to the uncertainty by having a document which opens an account in joint names without specifying whether it is a tenancy in common or joint tenancy.  Even worse, at times the document will specify which it is, but the bank person assisting in opening the account fails to call to the attention of the joint account owners which it is.  Much more often than not the owners of the account do not know of the difference and never think to ask the bank official which it is.  (Too often bank employees do not fully understand the differences in the types of ownership.)
A very common circumstance is the widow who opens a joint account with a child, expecting the child to be the owner of the account on the widow’s death.  But if the account card does not specify which it is, the presumption is that it is a tenancy in common (without survivorship), so that on the widow’s death, half of the funds in the account go to the widow’s estate, not to the joint owner of the account, often contrary to the widow’s expectations.
When parties acquire an asset jointly, unless they clearly manifest an interest to the contrary, the co-owners will own equal shares (two, a one-half interest each; three, a one-third interest; etc.).   In the event of a dispute between co-owners, a very common occurrence, either co-owner may ask a court to partition the asset; i.e. he or she can ask the court to order a sale, and the proceeds will be divided among the owners prorated according to their respective ownership interests.

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