When you own a property with someone else, you often do so as a jointly titled property. This means that you are both owners, but does not automatically mean that your co-owner takes full ownership upon your death. There are a number of different ways property can be jointly held and the wording on the deed matters. It’s also important to note that the laws on joint property vary from state to state, so what holds true in Utah will be different from surrounding areas.
Joint Tenants with a Right of Survivorship
This ownership requires specific language in a deed explaining that co-owners own the property as joint tenants. This is often a couple, but can also be other family members or individuals. . If the deed grants the other owner(s) a right of survivorship, then when one owner dies, the other immediately becomes the full owner of the property. While no probate transfer is necessary, it is a good idea to update the paperwork to show that the property now only has one owner. This will just make it easier for the surviving owner to do what they want with the property in the future without always having to produce a death certificate. It is important to note that in this situation, each owner of the joint tenancy must own an equal share of the property.
Tenancy in Common
Another option is to hold property as tenants in common. This method allows people to own and be responsible for different amounts of the property, such as when a few people share a mountain house and one person owns a larger percentage of the house. Each portion of ownership would pass during probate according to the individual’s estate plan and would not happen automatically. Buying property that is held as a tenancy in common is a little more complicated as well since someone must first check that all liens from each different owner are paid.
Tenancy by Entirety
This method of joint tenancy only works for a married couple and treats the married couple as one legal entity for purposes of the transaction. This works similarly to a “right of survivorship” situation in that ownership is transferred completely to the spouse upon the death of the other. However, in the case of a divorce, this type of property will revert to tenancy in common, allowing one spouse to do whatever they want with their portion of the property.
Estate planning covers more than just writing your will and drafting healthcare documents. A good estate attorney will look at all your property, discuss your goals, and help you craft the best path towards ensuring those goals are met, including looking at different ways to title your property.
The experienced trust and estates planning team from Dunn Law Firm have helped individuals craft estates that take many different forms. We also stay in touch to help you update your plan when the laws change or when your family situation changes. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.