Joint Tenants vs Tenants in Common


On a real estate deed, the owners can be joint tenants with rights of survivorship or tenants in common.  Joint tenants with rights of survivorship means, if one of the owners dies. his or her share will automatically pass to the survivor(s).  Tenants in common means that, when one of the owners dies, his or her share will pass according to what their will says.  When the owners are identified as husband and wife, they are automatically joint tenants with rights of survivorship.


Attorney Tom Olsen: John, you're on News 965, go ahead.

John: Hi, good morning. My girlfriend and I are kind of planning buying a house together with both our names on the deed and we were told that we should add the phrase "Right of Survivorship".

Attorney Tom Olsen: Well, John, first of all congratulations for calling me and asking me about this because if you didn't ask me about this, your title company, your closing agent would make up anything they want to and put it there. They might not even ask you what you want, John. Now you have an opportunity to know what the differences are and get it done the way you want it done, John.

Okay. John, if you both your names, joint tenants, right to survivorship, one of you passes away, the survivor would automatically own it all. If you have both of your names and nothing after it or the words ‘tenants in common’ and one of you passes away, that person's one half interest would pass according with that person's will. John, how much money are you putting down in this house?

John: Well, the house is going to be about $400,000 and we each have wills where we leave everything to the other person.

Attorney Tom Olsen: How much are you going to put down on the house?

John: It'd be a cash-buy.

Attorney Tom Olsen: Okay. You go into this thing, John, with $200,000 into it. John, do you have any children?

John: None.

Attorney Tom Olsen: Okay, so John, if you're in an agreement that if you pass away your $200,000 of acuity automatically goes to your girlfriend then you're going to put joint tenants, right to survivorship. Does she have any children?

John: No, she doesn't.

Attorney Tom Olsen: Okay. John, we started this conversation with joint tenants, right to survivorship, now do you understand what those words mean? If that's what you would like to do, just make sure your title company, your closing agent puts those words behind the deed.

John: And those are the words I would use?

Attorney Tom Olsen: Joint tenants’ rights to survivorship.

John: Okay, and you bring up one other question about $400,000 and $200,000 acquit. I'm putting up the money, does she have any tax liability on that, on her half?

Attorney Tom Olsen: Well, I guess in theory you might have gifted her $200,000 and in theory you would have to file a gift tax return, but John, check in with your accountant or CP about that, I'm not overly concerned about it.

John: Okay, very good.

Attorney Tom Olsen: All right John, but bye, bye. Hey John by the way. John, how long have you guys been boyfriend/girlfriend?

John: About five years and we're both senior citizens so we both got our heads on straight

Attorney Tom Olsen: Okay, well, John, I mean, you're the guy calling me today, hopefully your girlfriend's not listening, John. But there is another option, John, is that you put the house in your name only. You have a will that says, “When I die it goes to my girlfriend,” and that's going to -- you know, if things really go south, you're going to be in a much better position if that house is in your name only.

John: Well, that's one of the problems or that's one of the things I was thinking about concerning the tax liability.

Attorney Tom Olsen: Well, then there's your reason to tell your girlfriend why you're going to put it in your name only because of the tax liability.

John: Yes, she's very understanding.

Attorney Tom Olsen: John, I wish you guys the best and I'm just giving you from experience you know I've had plenty of boyfriend/girlfriends who bought houses together, and then what happens when they go their own way.

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