 Helpful Articles
from David Vollrath,
Union County Foundation Executive Director
The Foundation encourages you to work closely with your professional advisor(s)
as you develop your estate plan and consider your present and future charitable goals. |
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Co-Ownership of Property
By David Vollrath, Executive Director Union County Foundation
Real estate is a part of many estates. Sharing ownership of real-estate is quite common and is a good business decision in many cases. Sharing ownership does have
consequences particularly in regards to future transfer of the property. To further complicate the issue, laws can vary from state to state.
There are essentially three major forms of joint property ownership also known as concurrent ownership. The three forms are
tenancy in common, joint tenancy, and tenancy by the entirety. This article will focus on tenancy in common.
In general co-owners of any property share certain rights by default: unrestricted right of access, right to an accounting of profits made from the property, and a right of contribution for the costs of owning the property. For example a co-owner can be forced to contribute to the payment of property taxes. Co-owners don’t generally have an obligation to contribute to improving or repairing a property. Also each co-owner can in certain situations independently encumber their share of the property with a mortgage. This action can however result in effectively converting the type of co-ownership from one form to another (joint tenancy to tenancy in common).
Tenancy in Common is the default form of co-ownership when the type of co-ownership is not specifically spelled out. This form is most commonly used when co-owners, (also known as tenants in common or co- tenants) are not married or have contributed different amounts to the purchase. With this form, each owner is regarded as owning separate and distinct parts of the same property. By default each owner owns an equal share of the whole but if specified each owner can hold an unequal interest. For example one owner may own 75% and another own 25%. In the absence of any agreed upon restrictions each co-owner may freely transfer or sell their individual interest in the property. Tenants in common do not have the right of survivorship. The property will not transfer to the remaining co-tenants. If one owner dies his/her interest will be part of the deceased’s estate and will transfer according to a will or intestate succession if there is no will.
In general if any of the co-owners want to terminate the joint ownership they can seek a
partition of the property. This effectively divides the co-owned property into distinct lots or parcels. Each co-owner has a right to request the afore mentioned partition. If the co-owners can not agree on the actual partition of the land then any or all of the co-owners, as a matter of right, may ask the court to determine how the land will be divided. In some instances, where local law doesn’t allow for the physical division of the property, the court might order the entire property to be sold (partition by sale) with the proceeds divided among the co-owners.
You will want to consult your professional advisors regarding the particulars of co-ownership of property.
The Union County Foundation strongly encourages you to work with your professional financial advisors as you consider your charitable goals and all matters of estate planning. Please call our staff at 937-642-9618, email info@unioncountyfoundation.org, or stop by our Marysville office at 126 N. Main St. We are committed to helping you…. “Invest Today, Shape Tomorrow.”
The Union County Foundation encourages you to consider all aspects of charitable giving and estate planning. Please call our staff at 937-642-9618,
email info@unioncountyfoundation.org, or stop by our Marysville office at 126 N. Main St. We are committed to helping you.... “Invest Today, Shape Tomorrow.”
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