Co-Ownership Flashcards
What are the three types of co-ownership estates?
1) Tenancy in common
2) Joint tenancy
3) Tenancy by entirety
Tenancy in common (TIC)
(Recognized in ALL states)
TIC is the presumed tenancy created b/t co-owners (if no explicit language)
Requirement:
- Transfer to more than one person
Characteristics:
- Right of survivorship: NO
- Alienable
- Devisable
- Inheritable
- Partition: any person can - unilateral
*Subject to single owner’s creditors
Joint tenancy (JT)
(Recognized in ALL states, but some have limitations w/ personal property)
Requirements:
- Transfer to more than one person
- Specific language stating that tenancy is JT
- Four unities:
(1) Time: got title at same time
(2) Title: got from same
instrument
(3) Interest: own equal shares
(4) Possession: each has right
to possess whole
Characteristics:
- Right of survivorship: YES
- Alienable: creates severance (JT turns into TIC)
- NOT devisable
- NOT inheritable
- Partition: any person can - unilateral
*NOT subject to single owner’s creditors
Tenancy by entirety (TBE)
(Recognized in 1/2 states)
Requirements:
- Transfer to more than one person
- Clear, granting language
- Owners are MARRIED @ time of conveyance
- Four unities:
(1) Time
(2) Title
(3) Interest
(4) Possession
Characteristics: - Right of survivorship: YES - Alienable: only if BOTH agree (TBE turns into TIC) - NOT devisable - NOT inheritable - Partition: only if BOTH agree - multilateral
*NOT subject to single owner’s creditors
(only joint debts are subject)
What is severance?
Ends the right of survivorship (only applicable to JT and TBE)
JT: any co-owner can sever, but only that owner’s interest
TBE: both spouses must AGREE to sever
How to sever:
(1) Convey to 3rd person
(2) Convey to yourself
Once severed, estate become TIC* - eliminates four unities
Joint bank accounts
Joint bank account are created for three reasons:
- Convenience:
put someone else’s name on account to pay bills for you - Real joint tenancy:
want account to act like joint tenancy in real property - Survivorship:
you don’t want to give $ now - but when you die, want them to have survivorship
Issue: most states only recognize joint bank accounts as a real joint tenancy which presumes (1) at death, survivor takes all and (2) during life, rights may be equal (any holder can withdraw all $)
Solution: there must be clear and convincing evidence that account was acting as a convenience of a survivorship
Relations among co-owners
- Owing rent to co-owners: only occurs when one owner OUSTS (keep co-tenant off prop) the other, b/c normally both owners have a right to possess the whole
- Sharing benefits with co-owners:
(a) Business profits made on land - never shared
(b) Rent profits from 3rd party - shared - Sharing burdens with co-owners:
(a) Carrying charges: tax, mortgage payment -can have contribution action!
(b) Necessary repairs: can receive credit in accounting or partition
(c) Unnecessary repairs: can’t share the burden
(d) Improvements: can receive credit for the amount of increased value added to property from improvement
What is partition?
Ends a co-ownership.
*Can be sought by sole owner (except TBE) to end co-ownership.
Two types:
1) Partition in kind: physically divides up the property - presumed method of partition
* If division is not equal, then “owelty” requires compensation to the owner who received worse half
2) Partition by sale: sell the property and divide proceeds
When does the partition by sale occur?
- If property cannot be physically divided (i.e. a single house), or
- It’s in the interest of all parties to have partition by sale rather than division
When does owelty happen?
1) when a partition in kind has a better half and a worse half
2) when one owner has paid all of the property burdens throughout the years (at partition, benefiter owes $)
What’s the first question to ask when analyzing martial interests?
If the married couple live in a common law state or community property law state!
IL - common law
Marital interests under COMMON LAW system
1) Lifetime rights:
- Title governs (name on prop owns)
2) Divorce time rights:
- Each keeps separate property (states view diff)
- Marital property (states view diff) is divided
3) Death time rights:
- Title governs BUT surviving spouse has right of “force share” and can renounce will and take 1/2 or 1/3 of the property
Marital interests under COMMUNITY PROPERTY system
1) Lifetime rights:
- Categorized as
(1) separate property: what each spouse brings into marriage and gets after marriage (by gift, devise, or descent)
(2) community property (CP): any property acquired after marriage (not by individual gift, devise, or decent)
2) Divorce time rights:
- Each keeps separate property
- Each awarded a portion of CP (varies- 1/2 or equitable division - find who deserves more)
3) Death time rights:
- Surviving spouse retains his/her separate property and 1/2 of the CP
- Estate of dead spouse retains his/her separate property and 1/2 of the CP
*Community property issues:
- Tracing:
characterization of property follow it through sale, exchange gift
(i.e. car bought with W’s earnings - earning were CP - car is CP)
- Commingling assets:
varies upon state
- Management:
H/W manages own. For CP, either manages, except real estate (both must agree), titled property (holder manages), business property (active spouse manages)
Management is NOT ownership
Marital interests for MIGRATING COUPLES
Character of the property is the same - governed by:
- Real property: law of the situs (where it’s located)
- Personal property: law where couple is domiciled
*BUT new property acquired after the move is treated under the rules of the new system
