When two or more persons buy property jointly, the deed and the title of the land will indicate that the purchasers are co-owners of the property. On the other hand, the legal title of a property that is owned jointly has the potential to be structured in the form of a joint tenancy if the owners so choose. All of the individuals who are registered as owners of a property that is held in joint tenancy are entitled to an equal share of the property. In its most basic form, joint tenancy properties are distinguished by rights of survivorship, which outline what occurs in the event that one of the owners passes away.
The ownership stake in a property is totally retained by the co-owners who are still alive after it is held in joint tenancy with the right of survivorship. You may leave your portion of the property to your heirs by converting the title to tenants in common.
Understand Rights of Survivorship
The phrase “joint tenancy with right of survivorship,” abbreviated as “JTWROS,” is the correct title for a joint tenancy under the law. Unfortunately, you cannot leave your ownership portion in a property that is held in joint tenancy to your heirs in a will. You and the other owners of the property, on the other hand, have the right to inherit the dead owner’s part of the property if you hold the property in joint tenancy. Tenants in common, on the other hand, have the legal ability to transfer property to their successors, which starkly contrasts with the situation described above.
Sharing Joint Tenancy Properties
When a property is held under joint tenancy, all of the owners get an equal portion of the profits. For illustration purposes, if you and two other people possess 50 acres of property as tenants in common, you each own an equal portion of those 50 acres. Because joint tenancy properties have undivided shares, you have the right to utilise the whole of the joint tenancy property, not only the proportion of the property that corresponds to your part. The survivorship right, which stipulates that dead owners’ shares must be handed on to living owners in order to circumvent the need for probate, is the primary benefit of holding property in joint tenancy with another person.
When Joint Tenancy Converts
When the second-to-last owner of a property held under joint tenancy passes away, the surviving owners get their part of the property. When just one owner of a property held in joint tenancy survives following the passing of the other owner, the surviving owner is entitled to an ownership interest that is free and clear in the property. Everyone who enters into this kind of arrangement, which includes the JTC, should be informed of this fact before proceeding any further since it is, of course, intrinsic to the JTC.
Converting Your Share
To ensure that your heirs are able to inherit a portion of a property that is held in joint tenancy, you will need to convert that portion of the ownership into a TIC. “unilateral conversion” refers to the process through which a property share held under joint tenancy may be converted into a TIC. Owners in joint tenancies are permitted in California and other jurisdictions to unilaterally convert their shares to TICs by transferring their property interests to themselves. This is the only need for making the conversion. When converting a shared tenancy to a TIC, you should always make sure that the change is properly recorded.
Jointly Owning Property
When opting to own real property with other people, take a moment to reflect and thoroughly examine what you are getting yourself into. All joint tenancies and tenancies in common come with their own unique set of benefits and drawbacks, both of which are worthy of thorough consideration. To begin, when owners of a piece of property share ownership, their relationships with one another may become strained if they cannot come to an agreement over the property’s sale or other disposal. Before becoming involved in any case involving shared property ownership, it can be prudent to get legal advice from a professional with knowledge in real estate law.