Joint Ownership of Real Estate

Joint ownership of real estate can be structured several ways. Each form of joint ownership carries different title rights and probate implications, determined by state law and the deed’s language.

This article explains the four main forms of joint ownership of real estate—tenancy in common, joint tenancy with right of survivorship, tenancy by the entirety, and community property—and how each affects ownership, survivorship, and probate avoidance.

Tenancy in Common

What is tenancy in common?

Tenancy in common is a form of co-ownership where each co-owner holds a separate, undivided interest in the entire property. It is the only form of joint real estate ownership that never includes a right of survivorship.

Does a tenancy in common avoid probate of real estate?

Because it does not include a right of survivorship, a tenancy in common does not avoid probate. When an owner dies, that owner’s share passes to the estate for distribution to heirs or beneficiaries. Probate is usually required on every owner’s death.

The lack of a probate avoidance feature makes tenancy in common the most expensive form of co-ownership from a probate fees perspective. For example, when a parent leaves property to several children, it is not unusual for the children to own the property as tenants in common. If there are five children holding title as tenants in common, five separate probate proceedings will be needed to clear title (one after each child’s death).

What are the other features of a tenancy in common?

A tenancy in common has the following key features:

• Each owner can sell, gift, or mortgage their interest without the others’ consent.
• Ownership can be equal (two owner who each own one-half) or unequal (a 30-30-40 split between three owners).
• Any owner can file a partition action to force a sale.
• An owner’s creditors can reach that owner’s share, leaving the other owners to co-own the property with the creditor instead of the original owner.

How can I tell if property is owned as tenants in common?

In most states, tenancy in common is the default form of co-ownership for owners that are not married to each other. If a deed lists more than one owner and does not mention survivorship rights, title is presumed to be held as tenants in common. Many attorneys add the phrase “as tenants in common” to make the intent explicit.

Joint Tenancy with Right of Survivorship

What is joint tenancy with right of survivorship?

Joint tenancy with right of survivorship is a form of co-ownership where two or more people hold equal shares in the same property. It includes a survivorship right that automatically transfers a deceased owner’s interest to the surviving owners.

A valid joint tenancy requires the four unities of title—time, title, interest, and possession. All co-owners must acquire their interests at the same time, through the same deed, with equal shares and equal rights of possession. If one owner transfers an interest, the unities are broken, and the new owner becomes a tenant in common with the others.

Does joint tenancy with right of survivorship avoid probate of real estate?

Yes, while more than one owner is alive. The right of survivorship automatically transfers the deceased owner’s interest to the surviving owners without probate. Probate is required only on the death of the last surviving owner, when the property is no longer jointly held.

Example: If Peter and Paul own property as joint tenants with right of survivorship and Peter dies first, Peter’s interest passes automatically to Paul. Peter’s heirs do not inherit his share, even if his will says otherwise.

What are the other features of joint tenancy with right of survivorship?

In addition to the right of survivorship, a joint tenancy includes these features:

• Creditors of any owner can reach that owner’s share.

• Any owner may transfer their interest during life, which ends the survivorship right.

• Any human co-owners may hold property as joint tenants with right of survivorship. Other ownership forms—tenancy by the entirety and community property—apply only to married couples.

A joint tenancy does not control who ends up with the property when the last owner dies. On the last owner’s death, the property belongs to that owner’s estate and is distributed under that owner’s will (or, if the owner didn’t have a will, to the owner’s heirs under state law).

How can I tell if property is owned as joint tenants with right of survivorship?

Look for survivorship language in the deed. Most states use phrases such as “as joint tenants with right of survivorship and not as tenants in common.” A few states also require all grantees to sign a separate survivorship agreement.

Tenancy by the Entirety

What is tenancy by the entirety?

Tenancy by the entirety is a form of joint ownership available only to married couples. It treats the couple as a single legal unit, not as two separate owners. This form is recognized only in common law states. It provides survivorship rights (probate avoidance) and, in many states, strong creditor protection. A creditor of one spouse alone cannot seize property held as tenants by the entirety.

Does tenancy by the entirety avoid probate of real estate?

Yes, on the first spouse’s death. The surviving spouse automatically owns the entire property, and no probate is required. When the surviving spouse later dies, the right of survivorship no longer applies, and probate is usually required.

A surviving spouse who wants to avoid probate can use a probate-avoidance deed—such as a trust transfer deed, lady bird deed, life estate deed, or transfer-on-death deed—after the first spouse’s death.

What are the other features of tenancy by the entirety?

Aside from the spousal right of survivorship, tenancy by the entirely includes the following features:

• Tenancy by the entirety is available only to married couples.
• Tenancy by the entirety is not recognized in all states and depends on state law.
• Tenancy by the entirety provides strong asset protection from creditors of one spouse.
• Divorce converts tenancy by the entirety to tenancy in common, ending survivorship and protection.
• In states that recognize it, tenancy in common is often the best choice for married couples because it combines probate avoidance and creditor protection.

How can I tell if property is held as tenants by the entirety?

In many states, tenancy by the entirety is the default for married couples. If the deed identifies the owners as married—often by using “husband and wife” or similar wording—it usually creates a tenancy by the entirety automatically. Other states require specific language such as “as tenants by the entirety” or “as tenants by the entirety as not as tenants in common.”

Community Property

What is community property?

Community property is a form of ownership recognized in nine states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Like tenancy by the entirety, it treats a married couple as a single economic unit. Property acquired during marriage is presumed to be community property owned equally by both spouses, even if only one is named on the deed.

Does community property avoid probate of real estate?

Not by default. Community property has no automatic right of survivorship unless the deed specifically includes it. Some states require both language in the deed and a separate survivorship agreement signed by both spouses to create a right of survivorship in community property.

When spouses hold title as community property with right of survivorship, the surviving spouse automatically becomes the sole owner without probate. The surviving spouse can leave the property to anyone, with no obligation to the deceased spouse’s children or heirs. Spouses with children from prior marriages may prefer to omit survivorship rights so that each spouse’s half passes to their own heirs.

What are the other features of community property?

Community property includes the following features:

• Community property applies only to married couples.
• Community property favorable tax treatment: on one spouse’s death, both halves of the property receive a full step-up in basis, eliminating capital gains on prior appreciation.
• If the couple divorces, community property must be divided (often 50/50 unless there’s an economic imbalance).

How can I tell if real estate is held as community property?

In community property states, property acquired during marriage is presumed to be community property unless the deed says otherwise. If the deed is silent on survivorship, the property lacks survivorship rights. If it includes language such as “community property with right of survivorship,” or if the spouses have signed a separate survivorship agreement, the survivorship right applies.

Joint Ownership vs Living Trusts

A right of survivorship—whether through joint tenancy, tenancy by the entirety, or community property with right of survivorship—and a living trust deed both avoid probate, but in different ways.

A right of survivorship works alongside joint ownership of real estate, where title is vested in two or more living individuals. When one owner dies, the deceased owner’s interest automatically transfers to the surviving owners. Probate is deferred, not eliminated, because it becomes necessary when the last surviving owner dies.

A living trust works differently. It creates a separate legal entity—the trust—that holds title to the property. A trust does not die, so its ownership continues uninterrupted for as long as the trust continues. The trust document specifies what happens to the property after each owner’s death (including the last owner to die), allowing the property to bypass probate entirely.

A living trust also provides stronger protection against incapacity. If one joint owner becomes incapacitated, court involvement may be required to manage the property. Even a valid power of attorney can be rejected by banks or title companies. A living trust solves this problem by allowing a successor trustee to take over management automatically.

Joint Ownership vs. Life Estate and Lady Bird Deeds

With joint ownership, all co-owners share equal rights to the property at the same time. A life estate deed—or a lady bird deed, which is an enhanced life estate deed—creates a different kind of co-ownership. The owners’ rights exist at different times rather than simultaneously.

A life estate deed names one or more life tenants who have the right to use the property during their lifetimes. When the last life tenant dies, ownership passes automatically to the remainder beneficiaries. Both groups are co-owners, but their rights to possess the property occur at different stages.

Choosing the Right Form of Co-Ownership

In most states, the deed should clearly state the form of co-ownership. If it does not, the law usually presumes a tenancy in common. Specifying the ownership form avoids confusion and ensures the deed reflects the owners’ intent.

When all co-owners are individuals—not businesses or trusts—they can usually choose between tenancy in common and joint tenancy with right of survivorship. Other forms, such as tenancy by the entirety or community property, are available only to married couples, depending on whether the state follows community property or common law rules.

State law is highly relevant. In community property states like California and Texas, married couples may hold property as community property. In common law states like Florida, they may hold it as tenants by the entirety.

Choosing the right form depends on the relationship between co-owners, their goals, and the state’s laws:

• Married couples in states recognizing tenancy by the entirety often benefit from its probate avoidance and creditor protection.
• Couples with children from prior marriages should consider whether survivorship rights fit their goals, since survivorship can disinherit the first spouse’s children.
• Couples seeking to avoid probate completely should consider transferring property to a living trust.
• Business partners should title property in a business entity—such as an LLC with a strong operating agreement—to preserve management control and limit liability.
• Couples in community property states should protect the full step-up in basis to maximize tax advantages.