Do You Know How Your House is Titled? Are You Sure?

A common estate planning mistake is not knowing how your house or other real estate is titled, or incorrectly assuming that your house is titled a certain way.  When multiple people (most often a married couple) purchase a home, they are given the option to take title as joint tenants or as tenants in common.  This article is not a discussion of the merits or desirability of each option - as that is dependent on the owners' personal circumstances.  

For property held in joint tenancy, when one joint tenant dies, the surviving joint tenant automatically takes full title to the property upon the recording of the death certificate and an affidavit of survivorship.  No probate or other court proceeding is necessary to transfer title.  This is called a "right of survivorship."

However, property held as tenants in common does not have a right of survivorship.  Each owner has the ability to separately convey their interest in the property.  When one owner dies, the deceased owner's interest must pass through probate and is distributed according to the decedent's estate planning documents or the intestacy statutes (statutes that govern distribution of property when there is no Will). 

As you can imagine, this can cause problems - especially for married couples.  I receive several calls each year from surviving spouses who assumed that they have full title to their property when their deceased spouse passed away. The surviving spouse is now trying to sell the property, but comes to find out that they only own half the property because the couple owned the house as tenants in common.  Now a probate proceeding is required to transfer the deceased spouse's interest.

Minn. Stat. 500.19, subdivision 2 states, "All grants and devises of lands, made to two or more persons, shall be construed to create estates in common, and not in joint tenancy, unless expressly declared to be in joint tenancy."  Therefore, unless your deed expressly states that you own the property in joint tenancy, you will own the property as tenants in common.

If your estate plan assumes that your house is titled a certain way, check your deed to make sure it is written you intended.  If you are unsure what your deed states, check with an estate planning attorney for assistance.