Property Ownership and Your Will
Take a minute to check out what you know about property ownership. What would your answers be in these situations?
- Sisters Cindy and Janet inherited the farm that's been in their family for four generations. They own it as joint tenants with rights of survivorship. Cindy has written a will in which she leaves her share of the farm to her children. When Cindy dies, will her children inherit her share of the farm?
- Marie, age 85, has checking and savings accounts for which she's named her son Andy as a joint tenant with rights of survivorship. She did this so Andy can pay her bills, buy her groceries, and transfer money from savings to checking as needed to cover her expenses. Marie's intention is that when she dies, Andy will share any remaining funds in these accounts with his sister, Joan. Must Andy split the money with Joan?
The answer to both questions is "No." Surprised? Indeed, the form of property ownership you choose can lead to results you may not have predicted.
Property Ownership and Your Will
As you venture into the realm of property ownership, it's crucial to
Forms of property ownership
People often think of property as meaning real estate. But here we're using the term to refer to land, buildings, checking and savings accounts, investments, vehicles, and other possessions. Property ownership takes these legal forms, although not all of them are available in every state:
Sole ownership — One person owns the property and can make all decisions concerning it—as long as they meet zoning restrictions and other regulations. The owner also decides who will inherit the property by preparing a will. If there is no will, a court names heirs according to state law.
Tenancy in common — In this arrangement, two or more people own the property together and own a share of the entire property. Each co-owner decides who will inherit their share by naming beneficiaries in a will. That property share goes through probate, the court procedure for transferring ownership after death.
Joint tenancy with rights of survivorship — Two or more people own the property and, if one dies, their share automatically goes to the other co-owner(s) without going through probate. This form of ownership allows an easy way to pass property to surviving owner(s), but it's not available in all states. Joint tenancy with rights of survivorship overrides a will.
Tenancy by the entirety — This is available in some states only to married couples and, in a few states, to registered domestic partners. When one spouse dies, the other automatically becomes sole owner of the property. Also, neither spouse can sell or mortgage their half of the property without the other's approval.
Community Property — Nine states have community property laws. Under this arrangement, all property acquired during a marriage belongs to both spouses equally. However, a spouse can maintain sole ownership of property they acquired before marriage.
Seek Legal Advice
This information covers only the basics of property ownership. As noted, not all forms of ownership are available in all states. And the details surrounding any form of ownership vary from state to state. Consult an estate-planning attorney if you need help choosing the best option for you.
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For any further information or assistance, please don't hesitate to contact our friendly team. We look forward to helping you achieve your dreams of homeownership!
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