What is the difference between holding title to your home as tenants in common or as joint tenants?

What is the big deal?

There are several considerations when purchasing a home as a married couple.

In some states, like Kansas, the purchase defaults to a “tenants in common" status.

After years of marriage, many couples may desire to change their ownership on their home to joint tenancy.

According to a recent Washington Post article titled “Changing a home title from ‘tenants in common’ to ‘joint tenants’,” making this change can cause unintended consequences.

Joint tenants allows the property to pass immediately to the surviving owner.

It is important to consider any risks.

What is joint tenancy, or more precisely, "joint tenancy with rights of survivorship"?

It is a way of titling a property with multiple owners.

When one person dies, the share of the decedent automatically passes to the surviving joint tenant.

With tenants in common, each person is deemed to own an equal, undivided share in the home.

If there are two people owning the home, then each owns a 50 percent interest in the home.

If one person dies, this share would be distributed through his or her last will and testament or through "intestate succession" under to the probate statutes.

If you do not specify how you would like to own the property when taking title, the state will often have a default ownership designated under state law.

Again, in Kansas that default is tenants in common.

This can lead to some "unintended consequences" when it come to inheritance planning (or lack thereof).

I have seen particularly tragic consequences in the context of blended families.

When one spouse dies, the children of the decedent spouse own one-half of the home with their step-parent.

Yikes!

You get the picture.

Proper planning in advance can avoid World War III in such cases.

In most instances, changing the title to "joint tenants with rights of survivorship and not as tenants in common" can be simple.

Even so, you should not assume a easy process.

In most instances homeowners insurance coverage will not be impacted.

Why?

Because the same individuals would be listed as owners on the policy.

Depending on your estate planning goals, holding title as "joint tenants with rights of survivorship and not as tenants in common" may be a wise change to make, especially if you want your spouse to inherit your home directly.

Work with an experienced estate planning attorney.

Reference: Washington Post (July 6, 2020) “Changing a home title from ‘tenants in common’ to ‘joint tenants’”