In New Jersey, there are three different forms of joint ownership for real estate. You need to know the differences between them if you own property along with anyone else.
Joint Tenancy
Is Joint Tenancy the proper form of ownership for you? If you own property with someone who isn’t your spouse, it may be. Quite often, when seniors become widows or widowers, they may end up living with another person. However, you need to decide between you what you want to happen should one of you die. With Joint Tenancy, the deceased party’s estate may pass to their heirs. And if the heirs want to sell, that’s a potential problem for the survivor. Ownership can be defined where the deceased interests can pass to the surviving owner or to the deceased’s heirs.
Tenancy in Common
When two or more people own property, it’s typically owned Tenancy in Common. In this situation there are no rights of survivorship. Should one of the owners die, that person’s ownership reverts to their estate.
Tenancy by the Entirety
Married couples almost always own property this way. The ownership reverts to the surviving spouse when one person passes away.
Mandatory Disclaimer
Please don’t rely on this information, because I’m not an attorney. This post is simply trying to give you enough information to allow you to ask your attorney the right questions. Before purchasing a property with someone else, consult with an attorney. I’m only trying to give an overview so that you are aware of what questions to ask.
Tax Ramifications
With almost any estate, possible tax ramifications exist. The estate’s taxes may be affected by the type of ownership. Again, you should consult with an attorney or a financial adviser.
Bottom Line
The type of ownership of your property can affect more than who will own the property when you die. Financial ramifications and taxes need to be considered also.
You should direct your questions to an attorney or a financial adviser. We aren’t qualified to answer them. Conversely, your attorney or financial advisers aren’t Realtors, we are. Let them do the job they’re qualified for. However, if you’re ready to either buy or sell real estate, please contact us and let us do our job.
