How property is owned affects the property on several levels. There are advantages and disadvantages to the different types of property ownership. For example, Pat and Jeff planned to purchase some property in Palm City. They felt it was important to learn the differences between tenancy in common and joint tenancy with right of survivorship. It was important to compare the two types of property ownership in several key areas.
One of the key differences between tenancy in common and joint tenancy with right of survivorship involves the percentage of ownership.
In a tenancy in common, property ownership does not have to be split evenly. For example, four friends jointly own a property as tenants in common. However, one friend has a 40% interest and the other three have 20% interests each. If they decide to sell the property, the proceeds would be split according to the percentages of property ownership interest.
However, co-owners under a Joint Tenancy with Right of Survivorship arrangement own equal shares of the property.
Another important aspect of property ownership is the ability to bequeath your property interest to your heirs.
With tenancy in common, each owner may leave their share to any beneficiary through their estate plan. However, with joint tenancy with right of survivorship, the deceased property owner’s interest passes to the surviving owner.
The percentage of ownership matters. When property is owned as a tenancy in common, the joint owners own all parts of the property equally. For example, Richard and Julie own a 26 acre piece of property that includes a small pond. Julie wants exclusive use of the pond. However, because they own the property as a tenancy in common, each owner has equal access to the pond even though their ownership percentages are different.
Joint tenancy with right of survivorship also grants the owners equal access. However, the property is owned in equal shares.
At some point, co-owners of property may find it necessary to end the co-ownership.
If the property is sold, the proceeds will be split according to the co-ownership interest. Remember that the property may be held in disparate percentages if using a tenancy in common arrangement. However, property held as joint tenancy with right of survivorship typically is split equally between the co-owners.
You may need to address tenancy in common and joint tenancy with right of survivorship issues in your estate planning.
As a Florida attorney board certified in Wills, Trusts & Estates, Attorney John Mangan offers effective estate planning to his clients. To schedule an appointment, call us at 772-324-9050 or fill out our Contact Form. Our office is conveniently located in Palm City, Florida.