Tenancy In Common And Its Use
Tenancy in Common is the standard form of vesting, allowing real estate to pass to the owner’s heirs. When a owners dies their part of the land passes to their heirs instead of the remaining owners. In contrast, Joint Tenancy passes the property to the surviving owners.
There are many other ways to own land: Joint Tenants, Family Trusts, Partnerships, LLC’s, Corporations. Individuals usually hold real estate as joint tenants or tenants in common.
What Does Tenancy In Common Do
Tenants In Common is the default form of vesting in most states. When used, a deceased land owner’s property is transferred to their estate and heirs upon their death. It does not go to the surviving land owners unless they are also the heirs.
How To Use Tenants in Common
You can add “Tenants In Common” or “Tenants-In-Common” after the buyers names on the purchase deed to assure this vesting is used. If nothing is entered after the names it usually defaults to this form of vesting. This vesting can be used with two or more land owners.
When To Use Tenants in Common
This form of land vesting is used when the owners want their interest in the real estate to pass to their heirs instead of the surviving owners. Unrelated land owners usually use this form of land vesting.
Spouses usually use Joint Tenancy instead, so the surviving spouse receives the property. However, if the spouses have separate children, tenants in common is used to transfer their interest to their separate children instead of their surviving spouse.
Always use the correct vesting. If spouses mistakenly use tenants in common the surviving spouse is forced to hire an attorney and probate the deceased spouses estate to get the property transferred to them. This is not something they want to worry about after the loss of a spouse.
If Joint Tenancy is used, the transfer to the surviving spouse happens without probate, attorneys, courts or major expense. An affidavit of survivorship is recorded and is a simple one page document, easily prepared.
Again there are times when spouses would use Tenants In Common. Consider your situation and use the correct vesting for that situation.
Tenants-In-Common is the default form of vesting. It allows real property to pass to the heirs of the deceased. Owners who are not related usually use this form of vesting. Spouses also use it when they don’t want their interest in land to pass to the surviving spouse, passing it to their heirs instead.
If spouses intend for property to pass to the surviving spouse they use Joint Tenancy.