lecture notes 10-31-14

lecture notes 10-31-14 - 1 CONCURRENT OWNER WITH RIGHT OF...

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1 CONCURRENT OWNER WITH RIGHT OF SURVIVORSHIP – Joint Tenancy and Tenancy by the Entirety Often described as “will substitutes”, but not really: 1) Transferor gives up absolute control during lifetime 2) Tenants could die simultaneously – therefore need a will 3) Surviving tenant needs a will to transfer property at death JOINT TENANCY (JTWROS) – Concurrent ownership form whereby upon the death of one owner, the property passes to the surviving owner. Usually used by family members where there is less concern about the property interest passing upon death. By law the interests of all joint tenants are equal. I.e., if there are three owners, each has an undivided 1/3 interest in the property. Thus the share of each joint tenant need not and should not be stated in the title because the share is determined by law, not by the title. Upon the death of one joint tenant , the property passes by operation of law to the surviving joint tenant(s). Transfer is immediate upon death of a joint tenant. Upon proof of death (death certificate) the property can be re-titled. Proof of death will also be required for surviving tenants to transfer property to someone else. NOTE: Right of survivorship supersedes any other attempt to transfer joint tenant’s property interest at death such as in decedent tenant’s will. Right to “sever” – In most state any one joint tenant has the right to unilaterally “sever” the joint tenancy without the knowledge or consent of other joint tenants. If one joint tenant were to deed his/her interest to a third party, the joint tenancy has been severed with respect to his/her interest . That interest will not pass to other joint tenants upon death of owner of interest and the interests of other joint tenants will not pass to that owner upon their deaths.
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2 Also many jurisdictions will recognize a written agreement among the joint tenants to nullify the joint tenancy designation (i.e., to nullify the right of survivorship). TENANCY BY THE ENTIRETY : An ownership form that can only be created between husband and wife . Like Joint Tenancy – carries with it the right of survivorship . However, no right to sever : Neither spouse can transfer or encumber their interest without the consent of the other spouse. Not recognized in all states – in which case married couples are forced to use JTWROS. It is recognized in Pennsylvania! In case of divorce a tenancy by the entirety becomes a tenancy in common. TENANTS IN COMMON : Ownership form most often used by unrelated concurrent owners. No survivorship right : Decedent’s interest passes by will, state law of intestate succession or through a trust. Ownership interests need not be equal : Tenants in common can have different percentage interest in the property. These percentages are usually noted in the title to the property.
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