The Various Ways That Family Members Can Jointly Own Real Estate Property
Whether it is better to own your property in the form of currency or real estate is not a question with a one-size-fits all answer. Likewise, when it comes to getting something of value from a family member, some people would prefer to get cash, and some would prefer to get a house or other real estate property. Although real estate can be a valuable asset and can easily become generational wealth, it is undeniably easier to divide the contents of a bank account. In divorce cases, and especially in probate cases, family members sometimes disagree bitterly over the fate of real estate properties that they own jointly. According to Florida law, there are three different ways that people can own property jointly, and each one has its own implications when it comes to probate and inheritance. A Florida estate planning lawyer can help you decide which of these forms of joint ownership of real estate, if any, is best for your estate plan.
Tenants by the Entirety
Tenancy by the entirety is only possible in the following circumstances:
- The real estate property in common is the owners’ residence, not a rental property
- There are only two owners
- The owners are a married couple
When you are eligible for tenancy the entirety, it is a good option. It means that both spouses are 100 percent owners of the property. When one spouse, the surviving spouse becomes (remains, actually) 100 percent owner. The real estate property does not become part of the estate that goes through probate, even if the deceased spouse did not leave a will.
Tenants in Common
When people jointly own real estate as tenants in common, it means that each owner owns a portion of the property. The owners do not need to be related to each other, and their percentages of ownership can be unequal; when one owner dies or sells his or her share, it does not affect the other owners. Imagine that Alfie, Bertie, and Charlie own an investment property together; Alfie owns 50 percent, Bertie owns 30 percent, and Charlie owns 20 percent. Alfie sells his ownership interest to one of his golf buddies. Charlie dies, leaving half of his ownership interest to his daughter and one quarter to each of his two sons. Now Alfie’s golf buddy owns 50 percent, Charlie’s daughter owns ten percent, Charlie’s older son owns five percent, Charlie’s younger son owns five percent, and Bertie still owns 30 percent.
With joint tenancy, each owner owns his or her own share and can sell it, as with tenancy in common. If you own property by joint tenancy, you can include a “right of ownership” so that the other owner becomes the sole owner after you die. The other owner does not need to be your spouse; many times, the two owners are a parent and a son or daughter. The problem with joint tenancy with rights of survivorship is that you can inherit debts and liens on the property, leading to disputes during probate.
Contact Us Today for Help
An estate planning lawyer can help you account for jointly owned real estate properties in your estate plan. Contact Clearwater estate planning attorney William Rambaum for a consultation.