When you buy property with another person—whether it’s a spouse, family member, friend, or business partner—one small line on your deed can make a huge difference: the tenancy designation. It might seem like just legal jargon, but the way your ownership is titled determines what happens if one owner dies, how the property can be sold, and even how creditors may reach the property. Here’s what you need to know.
Common Ways to Hold Title
1. Tenants by the Entirety (Married Couples Only)
This form of ownership is available only to married couples in the DMV and most other states. It provides strong protection:
• Right of survivorship: When one spouse dies, ownership automatically passes to the surviving spouse—no probate required.
• Creditor protection: Generally, the property can’t be taken to satisfy debts of only one spouse.
• Automatic choice for married buyers. In most states, if you’re married and take title together, the law presumes this form unless otherwise stated.
2. Joint Tenants with Right of Survivorship
This form can be used by any two or more people—not just married couples or otherwise related individuals.
• Each owner must own an equal share.
• When one owner dies, their share automatically passes to the surviving owner(s).
• Because of the automatic transfer, the property avoids probate.
• However, either owner can unilaterally sever the joint tenancy, turning it into a tenancy in common.
3. Tenants in Common
This is the default form if no other is specified and the owners aren’t married.
• Each owner can hold a different percentage of the property (for example, 60/40).
• There is no right of survivorship—when one owner dies, their share passes to their heirs or estate through probate.
• This arrangement offers flexibility for business partners or investors but less simplicity for family co-ownership.
Why It Matters
Choosing the right tenancy isn’t just about names on paper—it can affect:
• Inheritance planning: Who will automatically inherit the property.
• Asset protection: Whether creditors can attach the property for individual debts.
• Ease of transfer: Whether the property must go through probate.
• Sale or refinancing: Whether all owners must consent to sell or mortgage the property.
Before You Close—Ask the Question
When reviewing your settlement documents, take a moment to confirm how title will be held. It’s a small detail with big legal consequences. If you’re unsure, talk with your title professional or attorney before signing. Adjusting your tenancy later can require a new deed and additional costs—so it’s best to get it right the first time.
Bottom Line
How your name appears on the deed determines what happens to the property down the road. Be intentional about your tenancy choice—it’s one of the most important decisions you’ll make in your real estate transaction.
