Q. My brothers and I plan to buy a home together, and wonder whether we should take title to the home as joint tenants or as tenants-in-common. Can you explain the difference?
A. Sure. There are distinct differences between these forms of ownership. The principal differences pertain to the equality of ownership and the right of survivorship. Here is the breakdown.
Joint Tenancy: For owners of property to qualify as Joint Tenants, the property must be (1) acquired at the same time, (2) by the same deed which clearly states that the owners are joint tenants, (3) the interests of all joint tenants must be equal, and (4) each must have the right of full access and possession of the property. These four requirements are often called the “4 unities” in the law of joint tenancy. If so acquired, this form of ownership creates the following right of succession: upon the death of the other joint tenant(s), the last surviving joint tenant takes ownership of the entire property, without probate or other proceedings. This right of survivorship is one of the most important features of Joint Tenancy ownership.
Tenancy-In-Common: By comparison, persons who own their interest as Tenants-In-Common can have different percentage interests in the property and can acquire their interests by different deeds and at different times. Further, upon the death of a Co-Tenant, his interest goes, not to the other co-tenants, but to his own beneficiaries or heirs.
In terms of succession upon death, it is sometimes helpful to think of Joint Tenancy as requiring, upon death, a “sideways” movement of ownership to the other surviving Joint Tenant(s), whereas upon the death of an owner holding his interest as a Co-Tenant, the succession moves “downstream” to his/her own heirs or beneficiaries.
Because of the right of survivorship, married couples will often hold title to their home as Joint Tenants, as most couples typically want the surviving spouse to acquire ownership of the entire home or other property, which would then occur without the need for probate. By contrast, co-owners who are friends, business partners, or even siblings, who may have their own families, would – upon their own death – typically wish their interest to go down to their own family members, and not to the other surviving co-tenants. This difference is significant.
In your situation, you indicate that you plan on making a purchase with your siblings. I presume that, if any of you passed away, each brother would want his share to go to his own family, which may include his own spouse or children, rather than to the other brothers. In that event, you would want to acquire title as Co-Tenants, so that this preference is clear.
An important comment about joint tenancy: if a joint tenant conveys his/her interest to someone else, or even to his own trust, that transfer may sever the joint tenancy, eliminate the right of survivorship, and create a Tenancy-In-Common. So, be mindful about such transfers when you do your own estate planning.