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Are you aware of the various ways real estate can be owned?
Tenancy in Common (TIC)
In a TIC, each owner has a percentage interest in the property, which does not have to be an equal interest. For instance, one person may own 60%, another with 30% ,and a third at 10%. As a TIC owner, you are free to transfer or leave your percentage interest in your will to whomever you wish. When you do pass away, your interest goes to your named heir or, if you left no will, the State Statutes will determine inherited ownership interest. Any of the owners can request the court to partition the property into separately owned parcels if disputes arise.
Joint Tenancy (JTWROS)
With this type of ownership, Joint Tenants with Rights of Survivorship [JTWROS} each of the owners have joint equal ownership interest. When one owner dies, his or her interest automatically transfers to the surviving owner without the need for probate. It is important that the joint tenancy is explicitly stated in the deed. If it is not specifically stated then the default is TIC.
If the JTWROS owners die simultaneously, the property converts to a TIC. And when the last remaining owner passes away, (even if by one minute) it transfers to his or her heirs.
You cannot transfer your interest in a joint tenancy in a will to anyone since the Deed takes precedence by the recorded deed, and your interest passes to the surviving owners. A debtor may be able to force the sale and partition of the property to collect on a debt even if only one owner is the debtor. This is why a Declaration of Homestead should be elected by all owners of real estate residing in the property. Owners can also ask the court to partition the property into separately owned sections as they can in a TIC.
Tenancy by the Entirety (TBE)
Only married couples may hold this type of real estate interest. The property cannot be sold or mortgaged without the consent of both spouses. When one spouse passes away, it will transfer automatically to the surviving spouse without the need of probate. Massachusetts law protects a tenancy by the entirety from being sold to pay off a debt or partitioned into individually owned sections without the consent of both spouses.
If a creditor does place a lien on the property, it can ONLY collect when and if the property is sold. If the debtor spouse dies and the property goes to the surviving spouse, the creditor will not be able to collect, and the debt is extinguished.
A TBE can only be terminated by death, divorce, or by the parties’ agreeing to convert the property to a TIC or JTWROS.
Consult Real Estate Lawyer Patricia Bloom-McDonald
Whether you are buying or selling real estate, having an attorney to advise you on the transaction can prevent costly mistakes in the future. How you create or obtain an interest in real estate is equally important. Consult real estate lawyer Patricia Bloom-McDonald about all your real estate concerns to ensure that any transaction is performed with full knowledge of your legal rights and options.