There are several forms of co-ownership. Tenancy in Common (TIC) and Joint Tenancy With Right of Survivorship (JTWROS) are the most common forms of co-ownership though they are not exclusive forms of ownership. There is also a tenancy by the entirety, a type of joint tenancy that applies only to husband and wife during the marriage. However, this article will only focus on a TIC and a JTWROS.
There are both pros and cons to each of these two forms of ownership. When deciding which form of ownership to pursue, you should keep in mind the survivorship rights, ownership rights and ownership responsibilities that exist with either a TIC or a JTWROS.
In a TIC each owner may own unequal interests (shares) in the property and may have received his or her interest at different times and through different means such as through a deed or an inheritance, etc.
In a TIC each owner’s interest passes to his or her heirs or those named in his or her will. There is no right of survivorship which automatically transfers the decedent’s interest to the remaining co-owner(s). This means that a TIC is subject to probate as the deceased owner’s share does not automatically pass to the remaining co-owner(s).
In a TIC each owner may also enter on the common property, take possession of the whole, occupy and utilize every portion of the property at all times and in all circumstances. The rights to use and possession, however, are not exclusive, and each common owner has the same rights. If income is derived from the property, each co-owner is entitled to his or her proportionate share of the income.
In a TIC each co-owner is also responsible for his or her proportionate share of expenses, taxes, and repairs. If the expenses are paid by one co-owner, the other co-owners must reimburse him or her for their share.
On the other hand, in a JTWROS each joint tenant has an equal, undivided interest in the whole property.
Also, as with a TIC, each joint tenant may enter onto the common property, take possession of the whole, occupy and use every portion of the property at all times but the rights to use and possession are, again, not exclusive. Each joint tenant shares in the same rights. If income is generated from the property, each joint tenant is entitled to his or her proportionate share of that income.
In a JTWROS, the interest of the deceased owner passes automatically to the surviving joint owner(s) and not to the deceased owner’s heirs or beneficiaries listed in the will. The remaining joint tenant(s) automatically inherit(s)the decedent’s interest. The right of survivorship continues until the sole survivor of the joint tenants owns the entire interest in the property.
Not every deed that describes the co-owners as joint tenants is sufficient to create a joint tenancy. In order to create a joint tenancy, the document should specifically state that the owners take property as joint tenants with the right of survivorship.
Tenancy in common is usually preferred over other forms of co-ownership. In Florida, if property is transferred to two or more persons and nothing is said in the deed about how the property is to be held, it is generally assumed to be held in a tenancy in common.
You should also be aware that a joint tenancy may be severed by any one of the joint tenants. Certain action taken by a joint tenant will break the joint tenancy and convert that joint tenancy into a tenancy in common, which does not have the survivorship feature. For example, a transfer by any one of the joint tenants of his or her interest to a third party will destroy a joint tenancy. Also, if a partition is granted in a suit for partition of real property, the order granting partition will have the effect of severing the joint tenancy.
So go ahead and check your deed to ensure that your co-ownership of real property does reflect your current estate plans. If that is not the case, then it is time to execute a new deed that contains the language necessary to carry out your estate plan goals.