A tenants in common occurs when two (2) or more people own property jointly and have the right to will or sell it. Tenants in common can have equal or unequal percentages of ownership. Tenants in common do not have right of survivorship. In case of an owner’s death, the property will need to go through the probate process. This could be a major drawback since probate can be very costly and typically takes up to a year or more to complete.
Example: Mary, Carla and Mike own 123 Hummingbird Lane together. Mary owns 50%, Carla owns 30% and Mike owns 20%. They all have the right to will the property to their heirs upon their death. They may also sell their ownership interest of the property anytime. Mike passes away and his 20% ownership in the property must go through probate process before it can be be transferred to his heirs.
In Part 5 I will explain tenants in common. In a six part series, I provide an overview of the most common vestings (how you hold title) and whether or not your property will avoid probate. Do you know if your home is protected from probate? Read More on other ways to hold title…
Continue to Part 1 – SOLE OWNERSHIP
Continue to Part 2 – JOINT TENANCY
Continue to Part 3 – COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP
Continue to Part 4 – COMMUNITY PROPERTY
Continue to Part 5 – TENANTS IN COMMON
Continue to Part 6 – LIVING TRUST
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Probate is a special court that supervises and determines how a deceased person’s estate is to be distributed. The probate procedure may take years to complete. Probate can become an expensive and time consuming process that can be avoided by creating a Living Trust or adding a Joint Tenant. Ultimately, however, the best solution to avoid probate is to vest your real property in your Living Trust.