What Happens When There Are Two Names on a Property Deed and One Person Dies?

Understanding what happens to a jointly-owned property when one owner dies is essential for estate planning and property management.

This article explores the options and implications when two names are on a deed, and one person dies, and how various forms of joint ownership, such as joint tenancy with right of survivorship, tenancy in common, and tenancy by the entirety, affect the property transfer. Laws also vary between regions, so we’ll address differences in states like Texas, New York, and British Columbia.

Also Read: https://jarrettlawfirm.com/two-names-on-deed-one-person-dies/

Table of Contents

1. Types of Property Ownership
2. How Jointly-Owned Property is Transferred
3. State and Province Rules for Joint Property
4. Right of Survivorship Explained
5. FAQs

Types of Property Ownership

When two people own a property together, they usually have one of the following ownership types:

1. Joint Tenancy with Right of Survivorship:
   • This type of ownership automatically transfers property rights to the surviving owner upon the death of the other owner.
   • No probate is required, as the property directly passes to the other owner.
2. Tenancy in Common:
   • This setup means each owner has a specific share, which can be passed to their heirs or as stated in a will.
   • Probate is necessary for the deceased owner’s share unless stated otherwise.
3. Tenancy by the Entirety:
   • Available only to married couples, this type of ownership functions similarly to joint tenancy with right of survivorship, automatically passing ownership to the surviving spouse without probate.
   • Not all regions offer this option.

How Jointly-Owned Property is Transferred

Joint Tenancy with Right of Survivorship

When a property is held under joint tenancy with right of survivorship, ownership automatically transfers to the surviving owner. This transfer avoids the probate process, which can be time-consuming and costly.

Joint tenancy is often chosen by co-owners, such as spouses, who want the surviving partner to take over the property without any delays.

Key Points of Joint Tenancy with Survivorship:

• The surviving owner has the right to full ownership after submitting a death certificate.
• This type of ownership simplifies inheritance.
• It provides protection from lengthy probate processes.

Tenancy in Common

With tenancy in common, each owner has a specified share of the property. When one owner dies, their share is passed according to their will or, if no will exists, under state or province inheritance laws. Probate is usually required to transfer the deceased person’s share to their heirs.

Key Points of Tenancy in Common:

• Ownership does not automatically transfer to the surviving owner.
• Each owner’s share is part of their estate.
• Beneficiaries or heirs may inherit the deceased owner’s share.

Tenancy by the Entirety

This option, available to married couples in specific regions, protects the property from being divided in case of a lawsuit against one partner. When one spouse dies, the surviving spouse automatically inherits the entire property.

Key Points of Tenancy by the Entirety:

• Provides automatic survivorship to the spouse.
• Protects property from individual creditors of one spouse.
• Not all states or provinces offer this type.

State and Province Rules for Joint Property

Texas

In Texas, joint tenancy with survivorship is recognized if stated explicitly on the property deed. For married couples, Texas also offers community property with right of survivorship, where the surviving spouse automatically inherits the deceased spouse’s share.

New York (NY)

New York recognizes joint tenancy with survivorship and tenancy by the entirety for married couples, allowing a smooth transfer of property ownership upon one owner’s death without probate.

British Columbia (BC)

In British Columbia, Canada, joint tenancy with right of survivorship is widely recognized. If two people own property jointly, the surviving owner automatically inherits the deceased person’s share upon their passing.

Right of Survivorship Explained

The right of survivorship is a legal rule that ensures a jointly-owned property passes directly to the surviving owner without probate. When a deed specifies joint tenancy with right of survivorship, the surviving owner gains complete control of the property upon one owner’s death by submitting a death certificate.

Benefits of Right of Survivorship:

• Simplifies property transfer.
• Avoids probate, reducing time and legal costs.
• Provides direct inheritance for co-owners, such as spouses or partners.

Drawbacks:

• Once a joint owner dies, the surviving owner automatically receives full ownership, overriding any will or estate plan that may have stated otherwise.

Also Read: https://jarrettlawfirm.com/two-names-on-deed-one-person-dies/

FAQs

1. What happens if two names are on the deed, and one person dies with no right of survivorship?

• Without right of survivorship, the deceased owner’s share will go to their estate or beneficiaries and will require probate.

2. Is probate needed if there is a right of survivorship?

• No, probate is not required if the property is held with right of survivorship.

3. Can joint tenants sell their share of the property?

• Yes, a joint tenant can sell their share, but doing so might convert the joint tenancy into a tenancy in common, affecting survivorship rights.

4. What should property owners do to ensure their inheritance plans are followed?

• Property owners should clearly state their joint ownership type in the deed and may consider consulting a legal professional.

5. How does tenancy in common impact inheritance planning?

• Tenancy in common allows each owner to decide who inherits their share, which is useful for estate planning.

Conclusion

Joint property ownership provides both benefits and potential complications in terms of inheritance. Owners with two names on a deed and one person dies should ensure they understand the ownership type to make informed decisions about property transfer and inheritance. Consulting a real estate attorney or legal expert is often beneficial, as they can help explain how joint ownership options impact estate planning and assist with any necessary documentation.