For most Americans, real estate is the most valuable asset in their estate. The primary residence is typically the real estate that receives the most attention, as well as the most financial investment and priority. It is not uncommon for people to treat real estate as an investment tool for the future, just as they would a pension or 401(k). With so much riding on one particular investment, it is important to understand who actually owns the asset. There are a variety of different ways that real estate may be titled, such as sole owner, tenants in common, or joint tenants. Joint tenants are exceedingly common and there are pros and cons to holding real estate this way.
One major advantage to having your home titled as joint tenants with, for example, your spouse or other close family member, is that once either of you passes away, the interest you held in the property will pass immediately and automatically to the surviving joint tenant. This means that it is not necessary for your ownership interest to pass through probate, making it much faster and simpler for the surviving joint tenant. Another advantage is that all joint tenants are entitled to their share of any rent or profit from the property. For example, if you own a home as joint tenant with a sibling, who then decides to rent out the home, you are entitled to part of the rental income, even if your sibling is the only one named as the landlord on the lease.
One disadvantage is that joint tenancy can lead to unintended consequences for blended families. For example, it is common for people to have children from a prior relationship when they remarry. If a new home is purchased as joint tenants with the new wife, and you pass away, your interest in the home will pass immediately to the new wife, and your children would not be entitled to receive any share of the home. This is true even if your will states otherwise, as the title of the home as joint tenants will override your will
Let us help you understand your rights and responsibilities regarding your real estate. Call today at (320) 299-4249 for a consultation