Joint ownership is when more than one person owns a piece of land or a financial asset and how you own the property can affect how your estate is settled upon your death. There are three basic types of joint ownership:
Joint Tenancy with Right of Survivorship
This type of ownership gives both owners full ownership of the asset and is most commonly seen in real estate property. In this case, if one owner dies, the other owner automatically inherits the deceased owner’s share. Other heirs are not able to inherit the property. A joint tenancy owner can then title the property solely in his or her name by showing the death certificate of the deceased owner.
Tenancy By the Entirety
This type of ownership is similar to Joint Tenancy with Rights of Survivorship except that it is normally reserved for married couples only. The reason is that Tenancy by the Entirety allows the couple to own a property as a single legal entity. If one spouse creates a debt, the creditor cannot attach to property owned by the couple “in entirety” because there are no shares to attach to, only the property as a whole.
Like Joint Tenancy with Rights of Survivorship, when one spouse dies, ownership of the property automatically reverts to the surviving spouse without the need for probate.
Tenancy in Common
In the case of tenancy in common, the property owned is usually part of a business. When a piece of property or business is partially owned by two or more people who are not married, they may own the property as shares. In this case, one person’s share may be bigger than the others. When one of the owners dies, that share will go to the deceased’s heirs instead of to the other owner. If the deceased owner had a Revocable Living Trust and funded his portion of the property into his Trust, the share of the property can avoid probate.