A Minneapolis Estate Planning and Probate Lawyer Explains the Power of Owning Property as Joint Tenants
One of the numerous ways in which you may transfer real property, or real estate, and avoid probate is through owning the property in joint tenancy.
Minnesota has two types of real estate ownership where there are multiple owners.
- Tenants in Common. In this form of ownership, the parties each own a distinct percentage of the total ownership in the property. It may, or may not, be an equal percentage. For example, a brother and sister may inherit an interest in the family cabin and take ownership at 50/50. Alternatively, that brother and sister may buy a rental property where the brother put up 30% of the purchase price so they will own it 30/70. Under Tenants in Common ownership, if the brother dies, his percentage will transfer to his heirs through probate.
- Joint Tenancy. In this form, the parties have an undivided interest of the total ownership of the property that is an equal percentage. In this case, both brother and sister each own 100% of the total property. This may seem like a minor distinction, but it has a big effect. Unlike in the scenario above, in this form of ownership, when the brother dies, his share automatically goes to his sister without the probate process. An important note, the deed must specifically state that the property is owned joint tenants or it will default to tenants in common.
If you own property with another person, review your deed to find out the type of ownership you actually have. If the deed does not state “joint tenancy”, you are owners as tenants in common and your share will NOT automatically go to the survivor but will go through probate at your death. If you would like to make a change, contact a licensed attorney to execute and record a deed that states you own the property as joint tenants.
As noted in a prior post, I meet with many clients after the death of one of the owners of a home/cabin who were sure the property was owned as joint tenants but when I conduct a search, we discover that it only by the deceased alone OR as tenants in common. At this point, we have no choice but to open a probate. Avoid this costly process with a simple fix now.
Minnesota Estate Planning Attorney
Contact Unique Estate Law today by calling (952) 955-7623 to set up an initial consultation to get your plan.