You’ve probably heard the term “joint tenancy” before. In fact, it’s fairly common practice for couples and business partners alike to use joint tenancy with everything from bank accounts, to personal property, and, of course, real estate.
But what does it mean exactly for the title of your home to be in joint tenancy? Find out below!
What is joint tenancy?
In most basic terms, joint tenancy can be held by two or more people and each person owns an equal share in the property. So, that means you and your partner both hold ownership of your home.
Joint Tenancy with the Right of Survivorship also allows the title to pass to the other joint tenant(s) upon the death of a joint tenant. This is important to allow the other joint tenant(s) to make decisions like selling a home.
What are the benefits of joint tenancy?
There are several benefits for holding the title of your home in joint tenancy. For one, it means that all parties involved have an equal responsibility in the property. This means you get to share in the benefits of owning a house, as well as the burdens. It also means that both parties incur any debt. This provides protections in situations like divorce.
In the event of a joint tenant’s death, the title automatically transfers to the remaining joint tenant(s). This means that you can avoid having to wait on the probate process to make decisions about the house.
What are the pitfalls of joint tenancy?
Joint tenancy can get complicated if the relationship between joint tenants sours. It’s important to understand that should conflict arise, neither party can sell the property without the other party’s consent.
What can I do instead of joint tenancy?
An alternative to joint tenancy is something called tenancy in common. Tenancy in common means that each person can own a specific portion of the property, instead of all parties owning everything. This also means each party can sell their part without consent of the other tenant(s). It also means that, should a tenant die, their portion of the property would pass directly to their heir(s), estate, or other designation instead of to the other joint tenant(s).
Joint tenancy tends to be the gold standard for people purchasing a home together, but if you are unsure about what option is best for you, consider consulting a real estate attorney to discuss your concerns.