Types of Joint Ownership

Personal Finance August 18, 2008 Print Friendly and PDF

Several types of joint ownership are described below:


Community Property: The laws of some states specify that most property acquired by either spouse during a marriage is held equally by husband and wife as community property. Laws in a community property state provide that any property purchased or salary earned by a married couple during the course of their marriage is owned equally by each.

Graphic of Community Property concept

Joint Tenancy with Rights of Survivorship: This type of joint ownership states that, upon death, an owner’s share goes to the other joint owner. Joint tenancy is created when two or more persons purchase or are given property at the same time. Each joint tenant owns an undivided interest in the whole property, and each has the right to possess, occupy, enjoy, use, or rent the property. The right of survivorship means that upon the death of one of the joint tenants, by law, the property automatically belongs to the surviving tenant and does not pass through probate. Therefore, upon the death of a tenant, property held by joint tenancy with rights of survivorship cannot be transferred or given away by a will.

Graphic of Joint Tenancy with Rights of Survivorship concept

Tenancy-In-Common: Ownership of property in which, upon death, each owner’s share goes to his/her heirs or beneficiaries is known as Tenancy-In-Common. It is created when two or more persons own property together but also own separate titles to the property. Property owners may or may not own the same percentage of the property. For example, one may own 25% while the other owns 75%. Each owner may do as he or she wishes with his or her interest in the property, such as give it away, sell it, or mortgage it without the consent or knowledge of the other owner. With tenancy-in-common, upon death, one person’s share passes as provided in his or her will or trust. Probate or other consequences are possible.

Graphic of Tenancy-In-Common concept

Tenancy-By-The-Entirety: This form of joint tenancy between a husband and wife is valid in a few states. Tenancy-by-the-entirety provides extra protections to real property owned by a married couple. One spouse owning property as tenants-by-the-entirety cannot mortgage, transfer, or otherwise deal with the property in any way that would affect the rights of the other spouse without the latter’s consent. When one spouse dies, the other still owns the entire property.

Graphic of Tenancy-By-The-Entirety concept

There are some important things to consider about joint tenancy:

  • Joint tenancy can have some advantages over other ways of transferring property, but there are dangers and unintended consequences. It is wise to check with a lawyer before entering into an agreement.
  • Generally speaking, if you have doubts about your co-owner, avoid joint-tenancy agreements.
  • If you are over the tax threshold, joint-tenancy agreements can cause real problems by transferring ownership to the wrong co-owner or making it harder to transfer property to minimize taxes. If the gross value of your estate is likely to exceed $1 million at the time of your death, it is a good idea to seek expert tax advice. With increasing real estate values, this amount is becoming more and more common.
  • Coordinate joint tenancies with your will, trust, or other parts of your estate plan. You need a will and/or trust with a joint-tenancy agreement; it is not a substitute for a will.