If two or more persons are purchasing real property, they have a few choices for how to hold title. The two most common are joint tenancy and tenancy in common.
Joint Tenancy.
Joint tenants are two
or more owners who own equal shares of the property. Each owner's interest in
the property is undivided, and all joint tenants have the right to use all of
the property. Joint tenancy is typically the type of ownership among spouses.
Joint tenancy includes the right of survivorship, which means that when one joint tenant
passes away the surviving
joint tenant automatically acquires ownership of the deceased person's share. The surviving joint tenant receives ownership without the property
needing to be probated.
Tenancy in Common.
Tenants in common are two or more owners, who may own equal or unequal shares of the property. Tenants in common each own an undivided interest in the property and enjoy equal rights to use the property, even if their ownership share is unequal. Each tenant in common has the right to convey their share of the property and can transfer title.
Unlike joint tenancy, in the case of tenancy in common, there is no right of survivorship. When one tenant in common dies, that person's share passes to their heirs, and not to the other tenants in common. However, since the decedent's ownership interest passes through their estate, it may be subject to probate.
Tenancy in common is often used in cases when non-family members jointly own property, such as business property or a vacation home. Sometimes, spouses with children from prior relationships will choose tenancy in common, so that their shares can pass to their respective children after death.
If the deed does not specify the type of joint ownership, Minnesota law presumes the owners to be tenants in common.
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If you are in the process of purchasing real property, it would be prudent to talk to a qualified estate planning attorney to help determine what course of action is best for you and your family.