Difference between Joint Tenants and Tenants in Common

An important topic in real estate and estate planning is how people appear or want to appear on title. Depending on your situation, how you choose to appear on title may make a significant difference to your overall estate plan.

People may appear on title in a number of ways.  Two main ways you may appear on title are as a joint tenant or as a tenant in common.

If you hold real estate as a joint tenant, you have a 100% ownership of the property as do the other joint tenants and these ownership interests are indivisible.  Because each joint tenant is a 100% owner, no joint tenant is able to sell his or her share of the property without the consent and cooperation of the other joint tenant(s).

Also, each joint tenant has a right of survivorship which means that the property automatically goes to the surviving joint tenant(s) when one joint tenant dies. This also means that the property never goes into the estate of the deceased joint tenant and, if the deceased joint tenant had a Will, the Will does not apply to the property jointly held.

Joint tenancy is generally how spouses appear on title for the family home.

If you hold real estate as a tenant in common, you own a divisible share of the property.  These shares do not have to be equal and, for example, one tenant in common may own one third of the property where the other tenant in common owns two thirds.  As a tenant in common, your ownership of the property may be sold without the consent or cooperation of the other tenant(s) in common. Each tenant in common is listed on a separate title showing his or her ownership share of the property.  There is no right of survivorship with tenants in common, and you may leave your share of the property as a gift in your Will.

Business associates may prefer to own property as tenants in common rather than as joint tenants.

If you own or plan on owning property with someone else, it is a good idea to consider your ownership options.  Your real estate or estate planning lawyer should be able to answer your questions and help you decide on the best course of action.