Donald M. Thompson - Wills, Trusts, and Estate Planning


Joint Tenancy, Tenancy by the Entireties,
Tenancy in Common

When two people hold property in joint tenancy and one dies sole ownership of the property automatically passes to the survivor. No court or other action is needed. A person's will does not affect such property. It passes to the survivor even if the dead person's will gives it to someone else. The gift in the will is ineffective because the dead person ceased to own his or her interest at death. More than two people can be joint tenants. On the death of one the joint tenancy is then divided among the survivors and so on until there is only one survivor.

One subspecies of a joint tenancy is the tenancy by the entireties. It is a joint tenancy between husband and wife in their residence. It is the same as other joint tenancies except the creditor of just one spouse cannot get the home to satisfy its claims.

There is another type of co-ownership between 2 or more people. This is called tenancy in common. When one of the owners dies his or her interest does not go to the survivor. Instead it goes to his or her heirs, or if he or she has a will, as specified in the will. This type of co-ownership is presumed whenever two or more people own property together. It takes special language to create a joint tenancy. The deed or other document creating the ownership must say "X and Y as joint tenants with the right of survivorship". Otherwise there will be a tenancy in common. There are some exceptions to this, such as where a bank's account agreement says two owners are presumed to hold jointly, but it is the general rule.

Whether co-owners are joint tenants or tenants in common, their ownership rights are not exclusive. Neither owns half the property from which the other is excluded. Instead each owns the whole to which they have equal rights. They are each said to have a (if there are only two owners) undivided interest in the whole. Naturally, this means the property cannot be sold, mortgaged, leased or given away without the signature of both owners. It also means the property is subject to the claims of creditors of both owners. Also, with bank accounts, each co-owner usually has the right to withdraw the entire account. These facts are often overlooked by people who wish to create joint tenancies with their children or others for convenience or to avoid probate. It should also be noted that property held in joint tenancy is includible in the dead tenant's taxable estate to the extent he or she furnished the money to buy the property. If the joint tenants are man and wife one half is included, but the marital deduction applies.

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Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603
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