This is the second in a series of post in what manner people, either individually or collectively own property, and how that property transfers upon death. The first post can be read by clicking here.
Property ownership and transfer on death gets much more complex when more people are thrown into the mix. Any property can be concurrently owned, at the same time, by several persons, all of whom have the right to ownership and enjoyment of that property. There are three types of ownership of property:
- joint tenancy;
- tenancy in common; and
- tenancy by the entirety.
Each type of ownership has different legal ramifications and pro/con issues with respect to estate planning.
Joint tenancy means that each person has equal interest in the property. It typically arises between husband and wife with respect to ownership of real estate or parent and child for other property. But it can arise through two non-married people.
The primary feature of joint tenancy is the right of survivorship of that property. This means that if two people own property and one of them dies, the surviving person will receive full ownership rights by operation of law in that property. For example, if a husband and wife own a home in joint tenancy together and the husband dies, the wife will be the sole owner of the home.
A will stating otherwise is ineffective on the property because the passing joint tenant’s rights in the property extinguish on their death. The property transfer to the other joint owners not the person listed in the will.
Under this type of ownership, the last living person takes ownership of the property and the property will be incorporated into their estate upon their death.
Joint tenancy can also be used to own financial accounts like a checking, saving or other financial institution account. To determine if a bank or brokerage accounts is jointly owned just look at the account name. The acronym “JTWROS” or “JTROS” is commonly appended after the names in the account and demonstrates the owners’ intent for the property to be jointly owned with survivorship rights.
The next post will deal with ownership by tenancy in common and tenancy by the entirety.