When you own property individually, your ownership rights are very simple and clear. When two or more people own property together, ownership rights can become more complicated. This is due in part because there is more than one way to jointly title property. Understanding the different types of joint ownership is crucial because the way in which you title property will affect not just your ownership but also the way in which your interest in the property is handled when you die. For example, if you wish your interest in the property to transfer directly to the co-owners you will likely need to title the property as “joint tenancy with rights of survivorship”.
In the state of Illinois if you fail to specify which type of joint tenancy you intend for the property tenants in common will be presumed. This is the most basic form of joint title. If you own property as a joint tenant in common you essentially own an undivided fractional interest in the property. What this means is that although the property is not physically divided each owner has a separate interest in the property. If one owner dies his or her interest in the property does not transfer to the other owners. Instead the interest becomes part of the deceased owner’s estate. As such it will eventually be transferred to the decedent’s beneficiaries or heirs. While this type of joint tenancy often works well for business arrangements, it can be dis-advantageous when you jointly own property with a family member.
Typically, when family members co-own property the intention of the owners is to share the property equally. Moreover, if you own property with your spouse, child, or parent, you would likely want your share in the property to pass directly to the other owners when you die without the need for your interest in the property to become part of your estate. In order to make this happen, the property needs to be titled as joint tenancy with rights of survivorship. The law of joint tenancy even supersedes a gift made in a Will. This means that even if your co-owner attempts to gift his or her share to someone else in a Last Will and Testament the law dictates that you will receive the decedent’s share of the property as long as the property is titled as joint tenancy with rights of survivorship.
Personal property can also be titled as joint tenancy with right of survivorship. For example, bank accounts, bonds, or securities can all be titled as joint tenants. It is important to remember, however, that the law requires very specific language to ensure that both real and personal property are titled as joint tenancy with rights of survivorship. To make sure that your property is properly titled, check with your estate planning attorney for advice before executing any ownership documents.
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