Joint Tenancy vs. Tenancy in Common: What is the Difference?

For Estate Planning Which is Better: Joint Tenancy or Tenancy in Common? The Answer May Surprise You!

Many estate planning clients are unaware of the difference between joint tenancy and tenancy in common. Not knowing can be hazardous to your family and property and interfere with the proper result with your Will or estate planning.

Let's discuss how TIC works vs. JTWROS.

1. JTWROS is a legal fiction. This is because each joint owner owns an undivided 100% interest in the property. Because each cannot own 100%, it is actually a construct to produce the following result. When the first joint owner dies, the deceased owner's interest vanishes. The survivor is left owning 100% of the property. Title doesn't pass to the survivor, they already owned 100%. The interest of the deceased owner vanishes for title purposes.

This is why for some couples of very modest means, owning property jointly works like a mini-estate plan to avoid probate at the first death. It accomplishes nothing at the second owner's death.

2. TIC ownership is different. Each TIC owner owns an undivided 50% ownership interest unless the title document, the deed specifies a different percentage. When the first TIC owner dies, their percentage interest passes through their estate or estate plan. The survivor's percentage interest remains in the survivor's hands.

The catch is this: neither is better than the other. The consequences of each is different. We pick the form of ownership we want based on how we want things to work, both on the first death and the second death. There are also tax differences that are beyond the scope of this article.

To learn if you have the right ownership form on real estate or other property, consult with your estate planning attorney immediately.

Let me know what you think and if you have comments and questions. Thank you.

Bernie Greenberg