What happens when two names are on a deed and one dies? The answer to this question depends on how the deed is worded. The property could be owned as joint tenancy with rights of survivorship, tenancy in common, or tenancy by the entirety. If your deed does not specify one of these, the default is tenancy in common.
A tenant on a real estate deed is a co-owner, not a renter of a property.
Joint Tenancy with Right of Survivorship
If the deed indicates joint tenancy with the right of survivorship when one owner dies, their share of the property automatically passes to the joint owner or owners. Each co-owner or tenant holds an equal share of the property, and they each have the same rights to use and enjoy the entire property, no matter how much they have contributed to its purchase and upkeep.
Joint tenancy with rights of survivorship means that the deceased owner’s share of the property automatically passes to the co-owners without needing to go through the probate process.
To officially transfer the property, the surviving owner needs to obtain a certified copy of the deceased co-owner’s death certificate and file it, along with the legal description of the property and original deed, with the local records office.
Unlike other arrangements, a property under joint tenancy with rights of survivorship does not allow ownership to be transferred to the deceased person’s heirs.
If a co-owner of a property held under joint tenancy with the right of survivorship sells their share of the property, the joint tenancy with rights of survivorship terminates, and it becomes a tenancy in common.
Joint tenancy with right of survivorship agreements override a will because the property does not go through probate. When the last surviving co-owner of the property dies, the property is included in their will and is passed to their heirs.
Tenancy in Common
If a property is owned as tenancy in common, there are no rights of survivorship. Each co-owner’s share of the property passes to their heirs as specified in their will.
Unlike joint tenancy with rights of survivorship, when a property is owned as tenancy in common, each tenant can bequeath their share of the property to their heirs. Tenants In common are not required to share interest in the property equally.
Tenants share the rights to use and enjoy the property, and each tenant can sell or borrow against their share. Owners of the property can buy out the other tenants and dissolve the tenancy.
If a disagreement occurs and the co-owners cannot reach an understanding, the court will divide the property. The respective tenant will individually own and manage each share of the property.
If there are multiple co-owners of a property and the deed is silent regarding the ownership structure, tenancy in common is the default situation if the co-owners are not spouses. If the co-owners are spouses, then the default ownership is tenancy by the entirety.
Tenancy by the Entirety
Tenancy by the entirety is an ownership option typically reserved for married couples. When one spouse dies, complete ownership of the property passes to the surviving spouse, similar to real estate owned as joint tenancy with rights of survivorship. The property does not pass through the probate process.
Property owned under tenancy by the entirety is considered to be a single property in which each spouse has an equal and undivided interest.
Since both spouses own the property, creditors cannot force the sale of the property in order to pay the debts of one spouse. This protects the property from sale or foreclosure if only one spouse has debts.
Common ways for tenancy by the entirety agreements to end are by mutual consent, divorce, or death.
Generally, if there are two names on the deed and the deed does not describe how the property is owned, the default is that it is owned as tenants in common if the co-owners are not spouses and tenancy by the entirety if they are.
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