In Missouri, as is the case in other states, both real and personal property may be titled in many different ways. An individual may hold title to property. A corporation may hold title to property. A trust may even hold title to property. Finally, property may be jointly titled when two or more people share ownership of the property. If you share ownership of property with another person it is imperative that you understand the different types of joint ownership in Missouri. Titling property as tenants-in-common, for example has significantly different legal consequences than titling property as joint tenants with rights of survivorship.
In Missouri, property may be titled as tenants in common or as joint tenancy. Within the category of joint tenancy there are some additional variations; however, understanding the difference between property that is titled as tenants in common and as joint tenants is an important starting point.
Tenancy in common can be created by any two or more co-owners of property. Property owned as tenants in common creates a distinct and separate ownership right for each of the owners. Upon the death of one owner, the property does not pass to the other owners. Instead, the deceased owner’s interest in the property becomes part of the decedent’s estate. As such the decedent’s interest is passed down to beneficiaries or heirs of the estate.
Joint tenancy with right of survivorship, on the other hand essentially creates a situation where each owner owns the whole property. Upon the death of one owner, his or her interest in the property passes directly to the other co-owners. In Missouri, almost any type of property-real or personal-may be held as joint tenancy. It is imperative, however, that the owners include the proper language in the deed, or other ownership documents, to create a joint tenancy. In the case of real property, if the owners are not husband-and-wife, the deed must expressly state an intention to create a joint tenancy with rights of survivorship if the owners intend to create a joint tenancy. Failing to include the proper language will create a tenancy and common because the law presumes that real property owned by two or more people who are not husband-and-wife is owned as tenants in common absent language to the contrary.
Personal property may also be held as joint tenants with rights of survivorship. A bank account, for example, stocks, and vehicles, may all be titled as joint tenancy with the proper language on the ownership documents.
While there are many advantages to titling property as a joint tenancy it is also important to remember that one should do this it may be very difficult to sell, or otherwise dispose of, your interest in that property in the future absent agreement by the other co-owner. Consult with your estate planning attorney if you have additional questions.
- Common Mistakes in Estate Planning – Part III - June 7, 2023
- The Not-So Transparent Corporate Transparency Act - May 30, 2023
- How Tax and Non-Tax Considerations Impact Estate Planning – Part II - May 25, 2023