If you are a homeowner, and I were to ask you who owns your house, you would probably answer me pretty quickly. And you might be right. But you might also be wrong.
If you own your property with someone else, you may or may not own the whole property. Most people who are married, for example, own their homes with their spouses. If you were to ask them how much of the house they would own if their husband died, almost all would reply, “all of it.” And almost all of those replying would be right. But not all of them.
It really matters how your deed is titled. What may seem like semantics, and what may seem like a few more words in the tens of thousands of words you are expected to have read at a real estate closing, matter greatly.
When you own a piece of property with someone else, you own it either as “Joint Tenants with Right of Survivorship” or as “Tenants in Common.” If your deed doesn’t say, you are Tenants in Common. So what are the differences between the two?
When you own a piece of property with someone as Joint Tenants with Right of Survivorship, you each own the whole thing. You each own a 100% interest in the property at the same time and together. Think of it as a type of marriage vow (“and two shall become one.”) If you were to die, you can’t take it with you, so your interest in the house goes away, and the surviving spouse’s interest doesn’t change: she still owns 100% of the house, just like she did the day before you died. And, since you each own 100% of the house, neither of you can sell the house or encumber it (get a mortgage on it) without the other person’s approval, since you can’t get rid of or encumber someone else’s property. This offers you a measure of protection if things go south.
When you own a piece of property with someone as Tenants in Common, you each own a percentage of the property. If it is two people, you each own 50% (unless it is designated otherwise); if it is three people, you each own 33 1/3%, and so on. So if you own a house with your wife, and you die, your portion goes to your estate, and your wife only owns 50%. This may not matter if you have a will which leaves your part of the house to your wife, but it often does matter. A partial interest can be sold or mortgaged. (Though, good luck finding someone who will buy a half interest in a house.) Something that is part of your estate could potentially have to be liquidated in order to pay any outstanding bills you might have. And, if you don’t have a valid will, your wife might not be the sole owner of her home anymore if the laws of intestacy require that someone else (like a minor child) get a percentage of your estate.
Most people don’t have any idea how their house is titled. The good thing is that this is a very simple thing to find out and fix, if need be. If you don’t have a copy of your deed, you can get one from the real estate record room of your county. If that is too cumbersome, most attorneys have an account which allows them to look up such things on line. A quit claim deed fixing the problem can be done quickly and relatively cheaply. So quickly, that many people mishear it as a “quick” claim deed.
So the next time someone asks you if you own your real property, make sure you know the real answer.
Nothing in this article should be construed as legal advice. This article is being offered for informational purposes only. No lawyer can advise you about your case without discussing the specifics of your situation with you.