A tenancy is a legal method by which a person holds property. There are three types of tenancy that can affect your estate planning.
- Tenancy by the entirety – is a type of shared ownership of property that is only available to married couples. It is recognized by most states. In this type of tenancy each spouse owns and undivided interest in the property. Each spouse has the right to the use and enjoyment of the property. The property cannot be sold or encumbered without the consent of both spouses. The spouses also have the right of survivorship, meaning that at the death of one spouse, the deceased interest in the property passes to the other spouse without the need to pass through probate.
- Joint tenancy – is another type of shared ownership in property. It is different from tenancy by the entirety in that the parties do not have to be married. Each party enjoys and undivided interest in the property and the right to the use and enjoyment of the property. Joint tenants have the right of survivorship. Title passes upon death of one of the parties outside of probate.
- Tenancy in common – In this type of ownership in shared property, the parties do not necessarily have an equal interest in the property. The tenant can freely sell, encumber, or pass interest in their share of the property through a will.
When planning you estate it is important to inform your attorney how all of your property is titled especially when determining how you wish to dispose of your assets at your death. Property held through joint tenancy will pass outside of your probate estate. Property that you own through tenancy in common would have to be dealt with through your will, or a trust or the laws of intestate succession.