The basic principle of joint ownership, that two people share ownership of some asset, is both very simple and generally well-understood. However, the vast majority of people don’t understand the details of the different types of joint ownership. Being caught unaware of the rules stipulating how your property is shared can lead to disastrous consequences when your joint assets don’t end up distributed the way you want. To protect yourself from disaster make sure to read on as we uncover three of the most common types of joint asset ownership.
Tenants by the Entirety
If you’re a married homeowner then this is probably the type of joint ownership your house falls under. With tenancy by the entirety you and your spouse each own the property completely. This means that neither of you can sell the house without the other’s authorization. There are immense benefits to this type of ownership though. Should one owner die, the property is automatically inherited by the other without the need for probate. Furthermore, if one spouse is in debt their creditor cannot place a lien on the property so long as the other spouse is alive.
Joint Tenancy with Right of Survivorship
This is one of the most common and easy to understand forms of joint ownership. As with tenancy by the entirety, with this type of joint ownership the shared property is inherited without probate. This type also provides the freedom for each individual to sell their share of the property without the need for permission. Another difference from tenancy by the entirety is that with joint tenancy with right of survivorship there are no protections against creditors.
Tenancy in Common
Tenants in common need not share their joint assets equally. Instead each owner holds a certain percentage of the assets and can sell or give away their share as they see fit. Unlike the other two types of joint ownership discussed, with tenancy in common an individual’s share is not automatically distributed to other owners after death. Instead, each owner’s share is given to their heirs. Furthermore, as with joint tenancy with right of survivorship, there is no defense against the actions of creditors.
Of course, this is only a light primer to an incredibly complicated subject. If you’re looking to secure the best protection for your joint assets and find the type of ownership that’s best for you then you need to trust a master of asset protection and estate planning. At Morgan Legal Group our team has skills and abilities that are second to none and will always work to help you make the most of your assets. Come for a consultation and find out what we can do for you.