Learn How Probate Affects Tenants-in-Common Property
Does Tenants-In-Common Property Require Probate?
A tenancy in common is not a type of property ownership that can typically avoid probate, at least not without a little help. Unlike joint tenancies, this arrangement does not carry rights of survivorship.
If your loved one has died and you owned property together as tenants in common, certain laws and rules determine who will inherit his ownership interest. It won't automatically be you.
What Is a Tenancy in Common and How Does Probate Affect It?
A tenancy in common is a form of property ownership between two or more people.
The tenants do not have to have equal ownership interest -- one can own a 25-percent share in the property while the other holds 75-percent ownership. They're both entitled to use of the entire property regardless.
Unlike with some other forms of property ownership, tenants in common are free to sell or transfer their shares to other people without the consent or permission of the other tenant or tenants. Each tenant reserves the right to include his share of the property in his estate plan, leaving it to anyone he likes when he dies.
This type of ownership is common among unmarried individuals when one contributes more financially to the property than the others. His percentage ownership in the property is typically commensurate with his contributions, so he has the right to transfer that interest to someone else during his lifetime or after his death.
When the Tenant in Common Property Is Titled in the Decedent's Sole Name
This situation may seem impossible on the surface.
How can a jointly-held property such as a tenancy in common be held in just one person's name? It can't -- but the deceased's ownership interest can be.
If the decedent's share of the tenant-in-common property is titled in his name alone, his ownership interest in the property will pass through his probate estate in one of two ways:
- It will go to the beneficiaries named in his last will and testament: If the decedent had a valid will, his portion of the tenant in common property would pass to the beneficiaries he named to receive it.
- It will go to the decedent's heirs-at-law: These are individuals who stand to inherit from a decedent in the absence of a will. Although it varies by state law, spouses and children are usually first in line to inherit. If the decedent failed to make a will, his portion of the tenant-in-common property would pass according to these rules, called laws of intestacy. But which state law will govern? If the tenant-in-common property isn't real estate, the intestacy laws of the state where the decedent lived at the time of death will govern. If the tenant-in-common property is real estate, the intestacy laws of the state where the real estate is located will govern even if they're different from the laws of the state where the decedent died.
When a Tenant-In-Common Property Is Titled in the Decedent's Revocable Living Trust
If the decedent titled his portion of the tenant in common property in the name of his revocable living trust, his portion of the property will pass outside of probate.
It will go directly to the beneficiaries named in the revocable living trust.