At some stage in your life, the prospect of co-owning property with another individual is likely to arise. This situation may present itself when you decide to marry and wish to jointly own property with your spouse, when you embark on starting or expanding a business and opt to co-own business assets with a partner, or perhaps when a parent deems it practical to include you on the deed to a home. Irrespective of the motive behind co-owning property, it becomes essential to establish an ownership document, such as a deed or title, requiring you to decide how you wish to legally hold title to the property. While you may not have previously considered the significance of how you hold title to jointly owned property, it is a decision that merits thoughtful consideration. To help you get started, the Essex Junction attorneys at Unsworth LaPlante, PLLC explain joint ownership options in Vermont.
3 Types of Joint Ownership in Vermont
Unfortunately, many people are unaware that there are different types of joint ownership. While each option gives you an ownership interest in the property, that ownership interest is not legally the same among the different types of joint ownership. Understanding your options and choosing the ownership type that works best for you is crucial when co-owning property. Vermont recognizes three types of joint ownership, including:
- Tenants in Common. With this type of joint ownership, each owner owns an undivided interest in the whole property. As such, each owner can sell, transfer, or encumber (borrow against) their own interest in the property. There is a presumption in favor of tenants in common in Vermont meaning that if the ownership document does not clearly state the intent to own the property as tenants with rights of survivorship or tenants by the entirety, the law will view ownership as tenants in common.
- Joint Tenants (with Rights of Survivorship). This type of ownership provides each owner with an undivided interest in the whole property; however, if the interest is sold, the joint tenancy ends and the owners become tenants in common. Of particular importance for estate planning purposes, if one of the joint tenants dies, the decedentâs interest automatically goes to the other joint tenant(s). This is known as a âright of survivorship.â For example, if you own property as joint tenants with your spouse, and you pass away, your interest in the property automatically transfers to your spouse outside of the probate process. A parent often uses this type of joint ownership as an estate planning tool to easily pass down a home to an adult child to avoid the need for the home to go through probate.
- Tenants by the Entirety. This is a special type of joint ownership only available to married persons. It has the same rights as joint tenants, with a right of survivorship, but there is no right to partition or transfer the property without the consent of both parties. Your spouse must agree to a conveyance if you hold property as tenants by the entireties and the tenancy cannot be divided to repay debts of one owner. When either spouse passes away, the surviving spouse automatically becomes full owner of the entire interest in the real estate because of the right of survivorship. In essence, titling property as tenants by the entirety provides you with all the benefits of JTWRS plus protection from creditors and no fear that someone else could become your new co-owner.
Do You Have Additional Questions about Which Type of Joint Ownership Is Right for Your Vermont Property?
For more information, please attend one of our upcoming FREE webinars. If you have additional questions about joint ownership in Vermont, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.
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