You can own property in a number of ways: you can own it individually or jointly with others. The manner in which you own property will determine your rights with respect to that property. Where you own property individually, you generally control the property individually, including the right to sell and mortgage the property.
When you reach out to us at Williams & Coleman, P.A., we will explain the various ownership forms and help you determine the best method for securing property.
Tenants in Common
Tenants with Right of Survivorship
Joint Tenants have the right of survivorship. So if one of the joint tenants passes away, the remaining joint tenants will become the owners of the property, including the share of the deceased tenant, without the need for any probate proceedings. A joint tenant is also free to sell or otherwise transfer his or her share as he or she see fit. If a joint tenant sells his interest in joint property, the joint tenancy becomes a tenancy in common, and no tenant has a right of survivorship.
Tenants by the Entireties
Only a husband and wife can own property as tenants by the entireties (TBE). TBE allows spouses to own property together as a single legal entity separate and apart from themselves as individuals. Creditors of one spouse may have problems reaching a spouse’s interest in TBE property. On the other hand, a creditor of both spouses will not have any problem reaching property held as TBE. A spouse may not sell or otherwise transfer their interest in TBE property without the consent of the other spouse. TBE includes the right of survivorship. So if a spouse passes away, the other spouse becomes the sole owner of the TBE property without the need for any probate proceedings.
Pay on Death
An easy way to avoid having to have a bank account go through the probate process is to create a “Payable on Death” bank account. The account remains in your name and subject to your control during your lifetime, and at death the bank will pay the account over to whoever you name as the beneficiary. Most banking personnel are familiar with these types of accounts and can assist you in setting one up.
Accounts of Convenience
Accounts of Convenience are not a good choice for handling the transfer of a bank account to a family member at your death. This is where you put your child’s name on the bank account as a joint owner with the right of survivorship over the account. This action arguably is a current gift by you to your child of some portion of the bank account.
If your child then has a creditor problem, his or her creditors will be looking to take a portion or all of your bank account. Please do not do this. Refer to the Pay on Death account titling above for the proper way to deal with transferring a bank account outside of probate.