Schedule a consultation to help you and your loved ones. However, it is important to understand the potential benefits and consequences of doing so. Each owner is able to conduct all business on the account. Therefore, a co-owner can pay the bills of another owner. However, a co-owned account can also have negative implications. The right of survivorship exempts the property from the legal process of administering the deceased's person's estate, also known as probate.
More often, joint ownership is in the form called "tenants in common," which does not necessarily include the right of survivorship. It is common for property to pass between a husband and a wife or a parent and a child, where the survivor is the normal heir to the property. Joint tenancy and tenancy in common, while similar, are legally very different. Confusion often arises because both types involve multiple ownership. Like joint tenancy, tenants in common may be related or unrelated.
However, neither co-tenant has an exclusive right to use or possess the asset, but each has an equal right to occupy, use or possess the property. More importantly, there is no right of survivorship. Should a co-tenant die, his share will transfer to his heir or per the instructions of a will. All co-tenants must agree on sell or modification decisions.
When two or more people own property like a home, either as joint tenants or tenants in common, each individual owns a share or interest of the entire property. This means that specific areas of the property are not owned by any one individual, but rather shared as a whole. While joint tenants with survivorship are similar to tenants in common in many ways, particularly the right of possession with respect to the property, there are some important differences with respect to what happens when a co-owner dies.
This article covers the basic differences between joint tenants and tenants in common, and how survivorship is treated by each type of tenant classification.
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