"Ask Nancy. She'll Know..."
I am purchasing a home with my mate of many years but I'm not certain how to take title to the property. What is the difference between ‘tenants in common' versus ‘joint tenants with right of survivorship?'
----‘How should we Title our Property'
Dear ‘How should we Title our Property',
I'm glad you asked! Basically, if you own a property as tenants in common, it means you own the property jointly and each have the right to use and possess the property in its entirety but each tenant's ownership interest can be distributed to the beneficiaries they designate in their will. However if one party dies intestate (without a will), the state will determine who receives their half of the property. Also bear in mind, that as tenants in common, generally none of the owners can take action that would affect the ENTIRE property without the written consent of the co-owner but each party may sell their interest without the consent of the co-owner.
Now, if you own a property as joint tenants with the right of survivorship, it means you own the property jointly and should one of the tenants die, interest in the property passes automatically to the surviving tenant without going through probate. However, owning property as Joint Tenants with right of survivorship is not a means to avoid inheritance or gift taxes so do consult an attorney well versed in estate or tax planning. And be aware that judgments or liens owed by one of the tenants can attach to their share of the property making your share vulnerable as well. Each partner in a joint tenancy has the right to sell or give away his share, but a sale or gift ends the joint tenancy, and the ownership becomes by tenants in common. And because either party can voluntarily dispose of their interest, a creditor is able to execute a judgment or lien on an individual's ownership.
Which brings us to our third method of holding title, unfortunately only available to married couples in most states, and that is Tenancy by the Entirety. This method of holding title has all the benefits of joint tenancy in that the survivor of the first owner to die will take title to the entire property outside of probate, but it also includes the additional benefit of protecting the property from some creditors. A home held as "tenants by the entirety" may only be reached by creditors of joint debts of a husband and wife.
If I can ever assist you or a friend with any real estate needs, please don't hesitate to call because...
I'd love to be your Realtor!
Nancy Dawsey, ABR, CRS, GRI
Signature Realty Associates
2234 Lithia Center Lane
Valrico, Florida 33594