After some confusing conversations lately with clients, today’s blog post is about Joint Tenancy & Tenancy in Common. This post is a summary of the larger linked article.
In Nebraska, there are essentially two ways to own property with someone: joint tenancy or tenancy in common. What is the difference between joint tenancy and tenancy in common?
Joint tenancy’s defining feature is called the right to survivorship. Right to survivorship, or survivorship for short, allows the “last person standing” to “get it all”. This is most common when spouses jointly own property. Thus, when the first spouse passes, the surviving spouse inherits title to the property. At the time of death, nothing is required to transfer the property to the surviving spouse. However, as the surviving spouse will own the entire property, the surviving spouse will determine who inherits the property at his or her death.
Tenancy in Common:
Tenancy in common, in contrast to joint tenancy, is when two or more people own an undivided interest in property. For example, a brother and sister inherit a parcel of land, which they must “share and share alike”. This means the brother and sister each own a 50% undivided interest in the parcel. At the time of death of each sibling, that sibling may pass on their 50% share to their heirs. Thus, the brother may pass on his share to his daughter, and the parcel would then be owned by the sister and brother’s daughter. Tenancy in common is criticized as it can result in fractionalization of ownership.
If you are in a situation where you are unclear as to the type of ownership, please feel free to give us a call. We’re always happy to help!