With close family members, joint ownership can feel natural. As a result, you do not even think about it while every owner is still living. Eventually, however, you will confront the legal issues that arise when one of the owners dies. At this point in time, things sometimes get messy.
Being proactive about estate planning can help your family avoid lots of confusion, stress, and unnecessary expenses. An experienced legal document preparer can help you make sure jointly owned property ownership transitions as it should when one owner dies. Read on to learn more about what happens to jointly owned property in this situation.
Property Ownership Depends on the Title
In California law, there is more than one way for people to own a piece of property jointly. Each type of joint ownership has different consequences when one of the owners dies. Here are some key differences between joint tenancy and tenancy in common.
“Joint tenancy” means that two or more people own equal shares of the property. With this form of jointly owned property, the title provides an automatic right of survivorship between the owners holding joint tenancy. This means when one owner dies, his or her share of the property automatically passes to the other owner or owners that were part of the joint tenancy title arrangement.
Another type of joint ownership is called “tenancy in common”. In this type of joint ownership, each owner owns a specific percentage of the property. As a result of this type of title, there is no right of survivorship. Imagine that three siblings, Alice, Bertha, and Clyde, own a piece of property together. If the three parties hold title to real property in joint tenancy, when Alice dies, her part of the property goes to the heirs listed in her will, not Bertha and Clyde. If Alice named her children, Destiny and Edward, as her heirs, then her ownership of the property will go to Destiny and Edward. The 1/3rd ownership interest of Alice now is held by her children who will share this 1/3rd ownership with Bertha and Clyde.
Estate Planning Considerations With Jointly Owned Property
The first step in planning for a jointly owned property requires you to look carefully at the title. The manner of title is the key about how ownership will transfer. If you need to modify property ownership, this will help you identify the right solution. For example, you may want to give someone a right of survivorship if one of the parties dies. Conversely, the parties might not want that right of survivorship. Either way, it is important to take action sooner rather than later. Once one of the owners dies, it is too late to change the way ownership was held.
Examining the title may reveal other issues as well. For example, if you cannot find the documentation specifying that you own the title to the property, you should resolve this now. If you fail to do so, your heirs could face massive confusion during probate. Probate is the process by of settling a decedent’s estate. This process also gives creditors a chance to claim debts owed to them by the deceased person. Once the estate pays its debts, the heirs receive the remaining assets. If you do not have a written title or if the title is not clear, your heirs may need to file a quiet title lawsuit.
Affordable Legal Service Options
Did you know that, in California, it is not legal for paralegals to provide legal document preparation services? However, this does not necessarily mean you have to hire an attorney. In the early 2000s, California ratified in the law a way for consumers to get low-cost legal help. A registered legal document assistant (LDA) can help you prepare your title transfers and other routine legal documents. Even better, this usually involves a lower price than you would pay for a lawyer. A People’s Choice is a great low-cost option for most routine legal matters in California. Contact A People’s Choice about your title needs and other document preparation services. Have immediate questions? Give us a call at 800-747-2780. We have staff available seven days a week from 8 am to 8:30 pm.
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