Often in the course of planning an estate, some individuals will want to own a piece of property jointly. It is possible for this to be accomplished in a couple of different ways, each with its own advantages and liabilities. If you are considering joint tenancy or tenancy-in-common on a title, a broad understanding of the differences can help you determine which is best for your needs.
Joint tenancy entails that both parties jointly own the piece of property. In practice, if a couple purchases a home and chooses to register the deed as joint tenants, then they would both fully own that property. Furthermore, joint tenants can enjoy the privilege of “right of survivorship,” which automatically transfers the interest of a deceased party to the ownership of the surviving party.
Tenancy-in-common allows for multiple individuals to own a piece of property, while dividing that ownership specifically. If three siblings buy a lake house together, then each of them would enjoy a one-third ownership of that property. However, tenancy-in-common does not offer the privilege of right of survivorship, so if one of the siblings was to pass away, his or her interest would need to be transferred through a will, or else the issue of ownership would be the responsibility of the court to determine. It would not, however, automatically transfer to the surviving siblings.
While this is merely a brief overview of a somewhat complex issue, it may give you the information you need to consider whether employing some form of multiple tenancy is right for you. When creating your ideal estate plan, the guidance of an experienced estate planning attorney ensures that you will be well-informed as you craft the perfect planning document for your needs.
Source: Findlaw, “What’s the Difference Between Joint Tenants with Survivorship and Tenants in Common?,” accessed Oct. 26, 2016