A misconception exists that title to a house should be held by husband and wife with rights of survivorship instead of a Tenancy in Common. The answer depends on the facts and circumstances of each family situation. In other words, what is right for you might not work for your neighbor.
A tenancy in common exists where more than one person owns real estate titled in each of their names, much as a husband and wife might do. Under this form of ownership, each owner owns an undivided interest in the property. This means that each is entitled to possession of the entire piece of property concurrently with the other owner. However, each owner is only entitled to his or her pro rata share of the value of that property.
Any tenant in common may sell his or her share or it may pass by will or intestacy at his or her death. One tenant in common may sell or give at death his or her share of the tenancy in common to anyone, including the other tenant in common. This means that the share of one tenant in common will not automatically pass to the other at death. If there are only two (2) tenants in common, and one gives his or her share to the other, the other becomes the outright owner.
There is a way to allow such a interest in property to pass automatically at the death of the first owner to the survivor. This is know as a joint tenancy with right of survivorship. Holding property as joint tenants with rights of survivorship may alter the parties' rights in several significant ways.
First, a person holding as a joint tenant with right of survivorship can not leave his or her interest in the property to anyone in his or her will. The property, at the death of one joint tenant, automatically passes to the other tenant.
Secondly, if a person holds title to property with right of survivorship, he or she may only transfer or sell a life estate in said property. In other words, the only way to convey the complete rights of property held as joint tenants with rights of survivorship is by deed containing signatures of both or all of the joint tenants.
Aside from these two (2) differences, there may also be important estate planning issues and consequences that may significantly affect your choice between the two forms of ownership. Please consult with us if you have question as to the proper form of ownership for you.