People often confuse owning property with another person as joint tenants versus tenants in common. In some cases, people think the two types of ownership act somewhat the same way when it comes to estate planning and passing title to property onto their heirs. However, when it comes to estate planning, owning property with another person as joint tenants is quite different from tenants in common.
When two or more people hold title to property as joint tenants, they jointly own the property, their ownership is equal, and each is entitled to possession of the entire property. When one of the joint tenants dies, the property passes by operation of law to the surviving joint tenant(s). What this means is that title to the property does not pass to the heirs of the deceased joint tenant. And because this occurs by “operation of law,” the title passing to the surviving joint tenant(s) is essentially automatic and occurs upon the death of the deceased joint tenant. This also means that transfer of the property to the surviving joint tenant(s) does not need probate and is not subject to probate administration of the deceased person’s estate. So, holding title in joint tenancy with another allows the property to transfer to the named joint tenant(s) (and no one else) upon your death and avoids the cost and time of having to probate the property.
Tenants in common, however, is a concurrent estate where each person owns an interest in the property and each person is called a cotenant. Each cotenant can own different percentages of interest in the property, but regardless of the percentages of ownership, each cotenant is entitled to possession of the entire property. When two or more people hold title to property as tenants in common and one dies, the interest of the deceased cotenant becomes a part of his or her probate estate. What this means is that the deceased cotenant’s interest in the property passes to his or her heirs (or according to his or her will). The downfall to cotenancy is that holding title this way does not avoid the cost and time of probating the deceased cotenant’s estate.
Not to confuse the above two ways to hold title, it is possible to sever joint tenancy ownership between two or more people which results in tenants in common type ownership. Ultimately, if you are considering owning property with another or you are doing estate planning and own real property, it is important to have legal counsel review how you hold title to the property. Any person interested in more information about joint tenancy or tenants in common should contact the Chilina Law Firm or another California law firm which focus on real property and estate planning for further information.
Authored by Greg Chilina and co-authored by Karen Chilina
Chilina Law Firm, a Professional Corporation, is a full-service estate planning, probate, trust administration, business law, and real property law firm that provides a wide-range of advising, transactional, and litigation services to its clients from its office located in Atascadero, California. The firm’s attorneys represent individuals and business entities in an assortment of transactional and litigation matters involving estate planning (including trusts, wills, powers of attorney, and medical directives), probate, trust administration, as well as general business law, contracts, corporate governance, land use, and real property. Chilina Law can be contacted by telephone at (805) 538-5038 or by email firstname.lastname@example.org visit the Chilina Law Firm atwww.chilinalaw.com. Chilina Law Firm is based in Atascadero, California and serves North San Luis Obispo County communities, including Santa Margarita, Atascadero, Templeton, Paso Robles, and San Miguel.
Attorney Advertising: The content of this blog/article is merely to provide general information on a topic of law and should not be construed as legal advice or the formation of a client-lawyer relationship. A client-lawyer relationship with the Chilina Law Firm will be created only through a written agreement signed by all parties. Anyone reading this blog/article should not rely on the information provided alone and should seek independent counsel regarding your specific situation.