Time, title, possession, ownership interest. The four elements of joint tenancy have endured throughout real property ownership law and create the most efficient way to transfer property to loved ones.
The joint tenancy is particular in how it is created due to the substantial impact it has on estate planning, mineral rights, and real estate property law. Owning property as joint tenants means that when one joint tenant owners die, the property automatically belongs to the surviving joint tenant or
joint tenants, in fee simple absolute. The downside to a joint tenancy is that it can be severed by actions of one joint tenant, without the knowledge of the other joint tenants.
Creation of a Joint Tenancy
The first element of a joint tenancy, time, refers to the point at which parties must create the joint tenancy. The only way to create a joint tenancy is through the instrument that transfers property to the joint tenants, at the same time.
The next element, title, refers to the shared ownership of the joint tenants. An important and appealing aspect of the joint tenancy is that all joint tenants have access to the full use and enjoyment of the property, and the property is held in every joint tenant’s name. There is also no limit as to how many joint tenants can own a piece of land.
The “equality of interest” is what separates the joint tenancy from other estates in ownership because no joint tenant can point to one area of the land and claim it for himself or herself, each owns their share of the undivided whole. Stark v. Coker, 20 Cal. 2d 839, 844, 129 P.2d 390, 393 (1942)
The last element, possession, is satisfied through every joint tenant having equal and open possession of the property. No joint tenant can prevent another from access to the property. The mere fact of a greater contribution to purchase price by one joint tenant will not overcome the presumption of equality. Shackelton v. Sherrard, 1963 OK 193, 385 P.2d 898, 901
In some states, grantees that are married can own property in the Tenancy by the Entirety, a form of joint tenancy with the added element of marriage of the grantees. The Tenancy by the Entirety, unlike a standard joint tenancy, can be severed by divorce of the parties and cannot be severed unilaterally.
Severance of a Joint Tenancy
The severance of a joint tenancy is, in some respects, easier to identify than the creation of a joint tenancy. Common law holds that a joint tenancy is severed when one party acts in a manner that is inconsistent with the joint tenancy.
Conveyance of the property by one joint tenant severs the joint tenancy. The underlying theory is that parties cannot be forced to into a joint tenancy with someone other than the original joint tenant. If Zoe and William own Granddad’s farm as joint tenants, but William wants to sell his interest to Tom, the joint tenancy will be severed, and Zoe and Tom will own the farm as tenants in common. If Tom simply replaced William as a joint tenant, then upon Zoe’s death, the farm would pass completely to Tom and leave nothing for Zoe’s heirs.
Tax liens also can sever a joint tenancy. 60 O. S. 74. When joint tenants own property and a tax levy is executed against one for the value of the property, the tenancy will be severed allowing for the property to be partitioned and the debtor’s parcel to be sold to the highest bidder. Joint tenancy cannot save a debtor from a lien.
Effect on Estate Planning, Minerals, and Real Property Law
Joint tenancy has several implications for the surviving owner of surface rights and mineral rights. Property owned by joint tenants automatically vests in the surviving joint tenant, at the death of another joint tenant. This has the full force and effect at law and means the property is not included in a probate of the estate of the decedent. Property can be sold or conveyed with consent of all joint tenants but will be severed if one joint tenant sells or conveys the property without consent of the others.
Grantors should be certain that all joint tenants will respect the rights and interest of other joint tenants as to the property. Further, you should remember that tax liens and defaults are not protected by a joint tenancy; thus, courts will partition the property of the debtor, resulting in a tenancy in common among the other parties.
There are 5 types of ownership: Sole Ownership, Joint Tenancy, Tenancy by the Entirety, Tenancy in Common and Community Property. In this article, we talked about equal shares of the property, deceased owners, partition action, proceeds and interest in the property.
If you have questions or need assistance with these or other complicated estate planning issues, give our team a call at 405-701-5355.