Joint Tenancy with Right of Survivorship vs. Tenancy in Common | #RichLifeLawyer Show 82
I had someone come into my office a while ago with a question. His brother had just passed away and they owned a property together.
He thought the property was going to go to him – that’s what the brother wanted – but he wasn’t sure.
I told him I’d take a look but that it really mattered how the property was entered, as joint tenancy with right of survivorship or as tenants in common.
He wasn’t sure, so we took a look.
And he had no idea something like could affect the way the property was transferred at death.
So I thought you might want to know about it too.
If you want to find out the difference between joint tenancy with right of survivorship and tenants in common, just watch the show!
Christopher Small wants to help you live a rich life now and leave a rich legacy when you are gone. He wants you to have your cake and eat it too. That’s what the #RichLifeLawyer Show is all about. It’s his way of helping you protect your family, create wealth right now, and establish generational wealth, for free. You’ll find information here on estate planning, financial planning, productivity, finance, self-improvement, family protection, tax avoidance, and anything else that will help improve your quality of life (and after-life). Christopher is the owner of CMS Law Firm LLC, a Seattle estate planning law firm. CMS Law Firm does three things really well: (1) estate planning; (2) probate; and (3) trust administration.
Joint Tenancy vs. Tenancy in Common Transcript
On this episode of the show, we’re going to talk about the difference between tenants in common and joint tenants with the right of survivorship.
Hey everybody, this is Christopher Small and this is episode 82 of the Rich Life Lawyer Show. I’m your host, I’m the owner of CMS Law Firm. And I am excited to be here with you today, talking about tenants in common and joint tenants with right of survivorship.
Now, this is a very, very important estate planning topic, and it deals with real property, so your homes, your apartments, your farm ground, any kind of property.
This could be an important factor and something to make sure that is right before you pass away, or if you’re giving your property away, because if you want it to go to the right people then these designations within your deeds need to be correct.
And I decided to do this topic today, because someone came into the office and their sibling had just passed away.
They had owned a property together, this person that was in my office and their sibling, their brother or sister. This person wanted to know what was going on and what the right course of action was moving forward.
Now, these two siblings, they owned this property together. And I told the person, “Well, it really depends on how the property is held on how you move forward. One way is going to be super easy. And one way is going to be a little more complicated.” And that’s where joint tenants right of survivorship or tenants in common comes into play.
Now, let me just tell you what each is, and I’ll tell you how it makes a difference within the story that I just told you.
Joint tenancy with rights of survivorship basically automatically turns over the property to the co-owner when one person dies. It’s automatic, it just happens.
And that’s easy, that in fact is what in most deeds, that’s the default language, is to be joint tenants with the rights of survivorship. If you’re not sure, you can always just go and look at your deed and it will tell you what’s on there.
Tenants in common on the other hand, own each of their property like halfsies. So, person A owns half, person B owns half. They can do whatever they want with their half, person A can do whatever they want with their half.
When someone dies within a tenancy in common, then person B’s half, for example, goes down to his heirs. It doesn’t automatically vest or turn over to the other property owner.
So you can see how those two different terms and these two different ways of owning property can have a significant difference in the way that the property is transferred when someone dies.
And that’s exactly what happened here.
So, I told the person, “Look, I’m not going to be able to tell you what you should do, until I look at the deed.” They ended up owning the property as tenants in common, which means when the sibling passed away, that half of the property is transferred wherever the person’s will says it goes.
So, if the deceased person gave his property to his sibling, then that’s fine, it’s easier, you still have to go through probate and do some things, but it’s the way that the guy gets it.
But, if you don’t have a will, or the will gives the property to their kids, for example, then that half of the property actually passes down to that person’s kids. That can be trouble, or difficult to do, because now you have one person that owns half of the property and the children of another person that own the property. They may not want to keep the property. They may not want to do anything with the property.
So this could be a problem. And even if it’s not a problem, even if the kids want to give away the property, it’s not so simple. Maybe we’ll talk about that in the next show.
But, it’s important to remember, important to look and understand how you own property, particularly if you own it with someone that’s not a spouse, because this can come back and have all kinds of problems later on.
So, that is the show of the day. Joint tenancy with right of survivorship means the property automatically goes to the co-owner, there’s no probate, there’s nothing. Boom, it’s done.
Tenants in common means each person owns their half individually and when one person dies, that half goes where they direct it. It doesn’t automatically go over to the other co-owner.
So, remember, I’m Christopher Small. The owner of CMS Law Firm. Despite my young appearance, I’ve been in practice for 12 years. I love estate planning, I love helping families and I love to help you if you’d like. Give me a call, 206-659-1512 you can email me [email protected] and I hope to hear from you.