Wednesday, July 29, 2009

The Power of Joint Tenancy

One of the many vehicles to transfer real property, or real estate, outside of probate is through owning the property in joint tenancy.

There are two forms of real estate ownership in Minnesota when there are multiple owners. The first is tenants in common. In this form of ownership, the parties each own a distinct percentage of the total ownership in the property. For example, if a husband and wife own property, husband owns 50% of the total property and wife owns 50% of the total property. In this form, if one of the parties dies, their distinct percentage transfers through probate.

The other main form of ownership in Minnesota is joint tenancy. In this form, the parties have an undivided interest of the total ownership of the property. In this case, both husband and wife each own 100% of the total property. This may seem like a minor distinction, but it has a big effect. Upon the death of one party, the other party automatically owns the entire property without the probate process.

In order for the property to be owned in joint tenancy, the deed must specifically state that the property is owned as such. For example, "Property X is granted by Mr. X. to Husband and Wife, as joint tenants." If the deed does not specifically state that it is in joint tenancy, then it is owned as tenants in common.

If you own property with another person, and both of you intent that the other should automatically receive your interest without the probate process, review your deed. If the deed does not state "joint tenancy", contact a licensed attorney to execute and record a deed that does.

25 comments:

  1. What about Joint Tenancy in Common with right of Survivorship; how does that differ?
    Can the state put a lien on your property if the transfer was made before the "look-back" period for Medicaid?

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  2. In Minnesota, "joint tenancy" refers to "joint tenancy with the right of survivorship". If the document transfering property,usually a deed, does not expressly state that it is owned "as joint tenants". They will own it as tenants in common under Minnesota Statute 500.19. Other states can and do differ.

    As far as a medical lien, the general rule is that a medical lien will attach to property owned by the individual while receiving assistance or owned during the look-back period. If the state has put a lien on property that was transferred before the look-back period, you should contact a licensed attorney who can review your particular circumstances and determine whether the lien is valid and how to clear up the lien if it is invalid.

    Good luck!

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  3. We are not sure if we are joint tenants for the lake cottage with my brother-in-law and sister-in-law or are we just with each other-meaning myself and my husband and them with each other? We own the cottage with my brother-in-law and sister-in-law. The deed dated 1999 conveys and quitclaims an 'undivided one-half interest as joint tenants to myself and my husband' and the other 1/2 to my brother-in-law and sister-in-law. What could happen to the property if they file for bankruptcy? If my brother-in-law dies (morbid thought) would the cottage heirs be their children or a future husband or her relatives or would it pass on to us? ST

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  4. You should bring your deed to a licensed attorney. It sounds as it may be held as tenants-in-common with the other couple. If so, you may run a greater risk that their issues could impact the cabin. Even if it's owned as joint tenants by both couples, you could run the risk that a medical assitance lien could attach to the property. One solution could be placing the property in a so-called cabin trust. You should speak with a licensed attorney who can review your situation and suggest ways to limit such issues.

    Good luck!

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  5. My mother, sister and myself built a custom home as joint tenants. My mother sold her cabin home to use to purchase this home. All three of us are on the mortgage but my sister and I split the house payment. My mother lets my sister for the most part control everything. My mother wants her portion to go to the rest of the family when she dies. Every time I bring up the fact that we need to see a lawyer to write it up, she gets "too stressed out" which really means my sister is faking being stressed out. I have a feeling that when my mother dies, my sister will try to buy my interest therefore screwing the rest of the family and I want no part of it. What can I do to get the ball rolling so my sister has no other choice but to do the right thing by the family?

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  6. By owning the property as joint tenants, who ends up owning it in the end will be a function of who survives the longest. In joint tenancy, when one tenant passes away, their interest will automatically pass to the other tenants and will not pass to anyone else. This is great if you don't want to property to go through probate, but it doesn't sound like that's what you or your mother intend. For example, say you and your mother die in a car accident tomorrow, the joint tenancy would mean that your sister gets the interests automatically. Depending on your state's laws, you or your mother may be able to independantly sever the joint tenancy and create a tenancy in common. If the three of you own as tenants in common, your ownership interests are independant and you can name who would take your interest at your death. You and your mother should speak with a lawyer licensed in your state about your options to sever the joint tenancy, even if you can't get your sister on board. Good Luck!

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  7. My father-in-law passed away a few months ago and there was a small sliver of land (adjacent to the homestead property) that wasn't in joint tenancy. Is there a way to avoid probate for just that small piece of land? He had a Will and the main property was in joint tenancy, so this is the only issue.
    Thanks!!

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  8. Generally, at least in Minnesota, the only way to convey real property owned by someone who has passed away is through a probate or, if enough time has passed, a decree of descent, unless the property was owned in joint tenancy, the owner only had a life estate or the owner executed a termination on death deed prior to his death.

    It's very likely that a probate might be your only option. Speak with an attorney in your state and make sure they are aware of what title standards in your state require to convey good title.

    Good luck!

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  9. Hi my father and I had joint tenancy in common on his property. When he passed away his executor and I began the probate process. Do we have to sell the property to finish probate? If so, would I be the sole seller or would his executor have a say in it as well? Thanks!

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  10. My sister's husband recently passed away. He had owned his home before they were married. They never bothered to file a quit claim deed to put my sister's name in title. There are no children. In the state of Minnesota, does she automatically come into title due to spousal rights? If not, what needs to be done?

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  11. Your sister may have automatic rights to his estate as his spouse, but the title to the property won't automatically transfer unless it is held in a way that causes an automatic transfer upon his death. It sounds like that is not the case. If so, she will need to probate that interest. She should bring a copy of the most recent deed to an attorney to determine what needs to be done, which may be a probate. Good luck!

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  12. My husband died. We both are both listed on the morgage app requesting joint tenancy and both of our name on the title. I found out after he died that my name was never put onto the title at closing. I do have the signed loan apps listing the above requests. I hired a probate attorney and he never asked if we had joint tenancy and now the deed to my house is in his adult sons name with me holding a life estate. The problem is that I am 49 and now stuck paying two mortgages on a home I will never really owen. I never saw the deed that listed my husbands name only but was told via phone that his name was the only name on the deed. Is joint tenancy on the closing paper or would this also but something that the closing company should have done but did not? What options do I have. It does not seem lawful for me to be paying on mortgages that I do not own. Please help. Sad, alone and confused.

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  13. How can I find out if my loan is joint tenancy? I have signed copies of the loan app but do not know where to verify this in the offical closing papers.

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  14. Sandie. Dealing is a real estate/probate situation that results in an outcome you didn't expect can be frustrating and stressful. I urge you to meet with a lawyer. Who signs on a mortgage alone does not dictate who owns property or how property is titled. Generally, a deed governs unless there is some type of adverse possession claim. I strongly urge you to meet with an attorney licensed in your state who can review the documents you have and explore your options. I wish you the very best of luck.

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  15. I have the mortage for our house in my name - my husband and I are tenants in common, but we have our own credit cards, bank accounts etc. He is seriously ill. If he passes away will his debtors have access to the value of our home?

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  16. Jennifer,

    I am pretty sure I met you at the Austin Republican Convention last year. Small world.
    My question is, I was married and my husband passed away 3 years ago. When we built our house on my inlaws land we bought the land from them contract for deed. I am still paying on that. We also took out a loan to build the house from a bank which is now paid off. The Contract for deed was in joint tenancy and states all as joint tenants with right of survivorship, not as tenants in common. Since my husband passed away this goes to me his wife correct? It would not revert back to his parents since he passed ever, correct. (As long as I continue to make payments on the contract for deed.) Also would it be a good idea to take out a bank loan and pay them off?

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  17. Sheena, it depends on whether you owned the property as a joint tenant or as a tenant in common with your father. You should speak to the probate attorney handling your father's estate to determine whether the property is a probate asset and the personal representative needs to transfer it or whether you automatically received his interest.

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  18. Creditors to an estate generally have access to assets in an estate, an the interest in real property owned as a tenant in common will be a probate asset. However, some assets will be exempt from creditor claims. You may want to meet with a real estate attorney to change the ownership to joint tenancy anyway to minimize a need for probate. Good luck!

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  19. Rights in a contract for deed after another contract for deed buyer passes away is a tricky one and depends on what's in the contract for deed. You should take it to a licensed attorney to review your rights under the contract. Good luck!

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  20. Does a quit claim deed from a husband and wife as joint tenants to themselves as trustees of a living trust sever the joint tenancy?

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  21. In a way, yes, the joint tenancy no longer exists, but for a much more basic reason. If you deed property into a trust, you no longer own it, either as a joint tenant or tenant in common. The trust owns it and will continue to own it after the trustees pass away. If you have questions about the consequences of deeding property into a trust, you should meet with a licensed attorney in your state who can review the deed and provisions of the trust.

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  22. My mother passed away and her three children were set up as tenants in common in the property. The property is in need of some maintenance to prepare it for sale and it is uninsured. Two of the three parties agree that the work and insurance needs to be taken care of. The third person says they are not paying for anything. What are our options? Can we hold the person not cooperating8 responsible for their share of expenses through a lien or something?

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  23. The question of whether or not another owner on the real property is responsible for costs on the property, lawyers call it "contribution", depends on the circumstances and the specific law of the state where the property is located. You should meet with an attorney licensed in that state to determine if there are steps you can take, whether informing the co-owner of the costs or attempting to get their permission, that can help you recover their fair share later on.

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  24. Say you have a married couple, each with a single child from a previous relationship, who have joint tenancy with right of survivorship on two properties. If one of them dies before the other, does their child effectively lose all title -- because the properties transfer to the surviving spouse first?

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    Replies
    1. Fantastic question! In fact, such a good question, the answer will be my upcoming post in September. Please take a look in the coming days. Blended family situations really do make difference in planning.

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