Co-Ownership Myths – I
Co-Ownership Myths – I
One of the most confusing aspects of estate planning is the numerous myths about co-ownership of property. Many people do not understand the differences between a tenancy in common and a joint tenancy with right of survivorship. Many people do not understand what a tenancy by the entirety is or was. Many people do not understand the differences between the common law forms of co-ownership and community property. Moreover, people may define their own forms of co-ownership by contract. This article discusses some of the many myths about the co-ownership of property.
Right of Survivorship
An automatic right to share in a co-owner’s share of property upon the co-owner’s death is known as a right of survivorship. When a co-owner of property with a right to survivorship survives all other co-owners, he or she becomes the sole owner of the property.
There is a myth that all forms of co-ownership include a right of survivorship. The myth is not true because, among other things, there is no right of survivorship in a tenancy in common. A tenant in common may give away his or her share separate and apart from any other tenant in common. If a tenant in common dies without leaving a will, the deceased tenant in common’s share of the property passes by intestate succession.
There is a myth that a form of co-ownership with a right of survivorship can be created in which one co-owner owns a greater share of the property than another co-owner. The myth is not true because were there is no equality of interest, the only form of co-ownership that can be or be created is a tenancy in common.
There is a myth that all forms of co-ownership avoid probate. The myth is not true because only property in a joint tenancy with right of survivorship, or in a form of co-ownership with a designated right of survivorship, always avoids probate. Only in such property is the deceased co-owner’s interest in the property transferred at the moment of the deceased co-owner’s death.
The only way property in a tenancy in common avoids probate is by transferring it to a trust before the deceased co-owner’s death.
It is wise to consult your lawyer when you want to make changes to, sell, or give away co-owned property. Your lawyer can help you avoid any misunderstandings stemming from the numerous myths about the co-ownership of property.