Tenancy in Common vs. Joint Tenancy: What Happens to Property When a Co-Owner Dies? Insights from a Seattle Estate Lawyer
When you share ownership of property with someone else, the legal structure of that ownership determines what happens to your share when you pass away. Many property owners don't realize that not all co-ownership arrangements work the same way, and this misunderstanding can create unexpected complications for families.
Understanding Tenancy in Common
Tenancy in common is a form of property ownership where two or more people each own a distinct, divisible share of the same property. Unlike joint tenancy, which includes a right of survivorship, tenancy in common allows each owner to pass their share through their estate plan or, if they have no plan, through the probate process according to state law.
When a tenant in common dies, their share doesn't automatically transfer to the surviving co-owners. Instead, it becomes part of their estate and passes according to their will or trust. If they had no estate plan, their share will be distributed according to intestate succession laws.
What Happens If There's No Estate Plan?
Without a will or trust, the deceased owner's share passes to their legal heirs, which may not be the surviving co-owners. For example, if two siblings own a rental property as tenants in common and one sibling dies without an estate plan, that sibling's share would typically pass to their spouse or children, not to the surviving sibling. This can create situations where the surviving co-owner suddenly finds themselves sharing ownership with people they didn't expect.
How Does This Differ From Joint Tenancy?
Joint tenancy includes a right of survivorship, meaning when one owner dies, their share automatically transfers to the surviving joint tenant(s) outside of probate. This is why many married couples hold their family home in joint tenancy. However, tenancy in common offers more control over what happens to your share after death, making it useful for business partners, friends purchasing property together, or family members who want flexibility in their estate planning.
Real-World Scenario
Consider two friends who purchase an investment property together as tenants in common, each owning 50%. One friend passes away, leaving behind a spouse and two adult children. Without clear estate planning, the deceased friend's 50% share would pass through probate and be distributed according to state law, typically to the spouse and children. The surviving friend would then co-own the property with people who may have different goals for the investment.
A Seattle estate lawyer can help prevent these complications by creating clear documentation about how property shares should be distributed and ensuring your estate plan addresses all your real estate holdings.
Planning Ahead
If you own property as a tenant in common, your estate plan should specifically address what happens to your share. You might leave it to your co-owner, divide it among family members, or include it in a trust with specific instructions. The key is making your intentions legally clear.
If you have questions about property ownership structures or need assistance creating an estate plan that addresses your real estate holdings, we invite you to schedule a consultation with our office at 206-925-3242 to discuss your personal situation. Mention this article when you call, and we'll help you understand how your property ownership affects your overall estate plan.
