What's the Difference Between Joint Tenants with Survivorship and Tenants in Common?

The main differences between these forms of joint ownership are how they arise, how they are destroyed, and how the subject property can be divided and sold. This article explores these differences in greater detail.

What Is an Undivided Interest?

Before discussing specific forms of joint ownership, it is useful to unpack the legal meaning of an undivided interest. When two or more people own real estate, each individual owns a share (“interest") of the entire property. Their interest is said to be “undivided" because each owner has a right to use the entire physical property even though their abstract right to the property is portioned out among them.

To illustrate briefly, imagine that two business partners own real property together. A warehouse, perhaps. The warehouse is not physically divided, but they share the entire physical property as a whole. However, each partner may have a 50% interest, or one may have a 30% interest and the other a 70% interest.

Each type of joint property ownership has certain restrictions on how the property interest can be divided. More on this below.

Tenancy in Common

A tenancy in common may involve two or more owners. Each tenant in common may own an equal share of the property, but not necessarily. Four owners may each own a 25% interest, or their interests may break down as 10%, 20%, 30%, and 40%. Each co-tenant has an equal right to possess, use, and enjoy the property (although co-tenants are free to make alternative arrangements among themselves).

Each co-tenant may also freely sell their interest. Similarly, when a co-owner of the property dies, their share remains part of their estate and can be passed on in their will. Whoever receives the interest simply steps into the previous co-tenant's shoes.

Further, the transfer of a co-tenant's interest may occur at any time without disturbing the status of the other co-tenant's ownership. Jointly owned property is presumed to be held in a tenancy in common unless the property deed specifies otherwise.

Joint Tenancy with Right of Survivorship

A joint tenancy with right of survivorship (JTWROS), like a tenancy in common, is a form of co-ownership that may involve two or more owners. However, a JTWROS must comply with a number of restrictions.

The Four Unities

A JTWROS must satisfy the so-called “Four Unities." They are as follows:

1. Unity of Time. Each joint tenant must take title of their share at the exact time.
2. Unity of Title. Each joint tenant must take ownership of their share through the same instrument (e.g., a property deed). Normally, the legal document must specifically state that it is creating a JTWROS; otherwise, the document creates a tenancy in common by default. The specific formation language varies by state.
3. Unity of Interest. Each joint tenant must have an equal interest. Two owners must each have a 50% interest, four must each have a 25% interest, and so on.
4. Unity of Possession. Each joint tenant must have a legal right to possess, use, and enjoy the property equally. Unlike co-tenants in a tenancy in common, joint tenants cannot alter this arrangement.

If any of the Four Unities are violated, the joint tenancy is destroyed and becomes a tenancy in common. In particular, note that the Unity of Time and Unity of Title each operate so the joint tenants cannot transfer their share without destroying the joint tenancy. Their share cannot be sold, inherited, or otherwise transferred.

Right of Survivorship

If one of two owners of property held in a JTWROS dies, ownership is transferred automatically to the remaining owner. This is called a right of survivorship. Unlike a tenancy in common, a co-owner cannot transfer their interest in property owned subject to a right of survivorship without destroying the right.

Does Either Avoid Probate?

Probate has two meanings. Technically, it refers to the legal process of checking whether a deceased person's last will and testament is valid and authentic in a probate court. It also refers to the general process of distributing a decedent's estate.

Depending on the size, value, and complexity of the estate, the probate process can be time-consuming and expensive. So, does a tenancy in common or JTWROS avoid probate?

Tenancy in Common

Typically, a tenancy in common will not avoid probate. This is because a co-tenant's ownership interest remains part of their estate when they die. It must be distributed by will or according to state laws of intestate succession.

If you want to keep property in a tenancy in common out of the probate process, you could transfer it out into a trust. Property in a trust does not belong to the person who supplies the property; instead, it belongs to the trust itself. It therefore is not part of the person's estate at the time of death.

Joint Tenancy With Right of Survivorship

By contrast, the ROS in a JWTROS typically ensures that a joint tenant's interest does avoid probate. When there is only one joint tenant remaining, they become the sole owner. A sole owner's death means their 100% share must be distributed as part of their estate and therefore does not avoid probate. Again, this may be avoided by transferring the interest into a trust.

By extension, one can imagine a conceivable though improbable scenario in which all joint tenants die at or near the same time (e.g., in a plane crash), making it impossible to determine who was the last surviving joint tenant. In this case, each joint tenant's share might pour into their individual estates and fail to avoid probate.

Questions? A Local Attorney Can Help

Tenancies in common have the advantage of flexibility. Joint tenancies with right of survivorship have the advantage of permanence. Understanding the advantages and disadvantages of each ownership arrangement before entering into one can avoid serious headaches down the road. A local real estate or estate planning attorney can provide valuable legal advice.