Many new homeowners wonder about the two common ways to take title. In this blog, we will explore the meaning of holding title as Tenancy in Common vs. Joint Tenants and how they differ.
Tenants in Common: Co-Ownership with No Right of Survivorship
Tenancy in common impacts how property is inherited. When two or more individuals own an asset, such as a home, in equal parts, it is tenancy in common. However, there are no rights of survivorship. When one co-owner dies, the surviving owner(s) do not automatically receive the deceased co-owner’s interest. Instead, the property will be inherited according to the deceased co-owner’s will. If the surviving co-owner dies without a will, the Iowa laws of intestacy will govern who inherits that specific share of the property.
Tenancy in common is suitable when co-owners agree on goals and communicate clearly. However, it can also cause disagreements in the future. For instance, if siblings inherit a vacation home from their parents and own it as tenants in common, a unanimous decision is needed to sell the entire interest in the property. Deciding how to use or dispose of the property can be stressful and create fractures in family relationships.
Joint Tenancy: Co-Ownership with Right of Survivorship
Joint tenancy simplifies property transfer. When two or more people own a property, each individual owns a 100% interest in the property with the other joint tenant(s). Unlike tenants in common, the surviving joint tenant immediately becomes the owner of the entire property upon the death of the other joint tenant. This is known as the right of survivorship.
A familiar example of joint tenancy is a family home owned by a husband and wife. When the husband dies, the wife maintains complete ownership of the whole property. To effect the transfer of ownership, a simple affidavit of surviving joint tenant will need to be filed with the county recorder. With the assistance of a local real estate attorney, the paperwork is minimal and simple.
Titling property in joint tenancy can create a smoother transfer upon death of another joint tenant. When choosing how to title your property owned with another individual or individuals, it is essential to consult with an experienced real estate attorney. Factors such as ease of future transfers, potential heirs, and wishes after death should be taken into account.
Takeaway
Understanding the differences between Tenancy in Common vs. Joint Tenancy can significantly impact property ownership. Tenancy in common is suitable when co-owners agree on goals and communicate clearly, but it can also cause disagreements. Joint tenancy simplifies property transfer and creates a smoother transfer upon death of another joint tenant. To get expert advice on titling your property, consult with the experienced team at Danilson Law.
