Types of Property Ownership

There are only three ways to own property: in your individual name, in joint names with others, or by contract rights.

Here is a summary of what each type of ownership means and what will happen to the property after you die.

Individual Ownership

Individual ownership refers to property that is owned in your sole name without any other owners or a beneficiary designation. After you die, property owned in your individual name will usually have to go through probate to get it out of your name and into the names of your loved ones.

Types of Joint Ownership

Joint Tenancy With Right of Survivorship (JTWROS)

In joint tenancy with right of survivorship, all the owners hold an equal right to the property. In other words, any owner can withdraw the funds from an account without the knowledge or permission of the other owners.

However, with jointly owned real estate, in most states, the property cannot be sold or mortgaged without the consent of all of the owners. When one joint owner dies, ownership of the property automatically passes to the surviving joint tenants without the need for probate.

In general, all that the surviving owners will need to do is produce a death certificate or record one in the appropriate land records to confirm their ownership of the property.

Tenancy by the Entirety

Tenancy by the entirety is a type of joint ownership with rights of survivorship that is recognized in some states and can only exist between a husband and wife. Either spouse can withdraw the funds from an account without the knowledge or permission of the other spouse.

However, with real estate, in most states, the property cannot be sold or mortgaged without the consent of both spouses. When one spouse dies, ownership of the property automatically passes to the surviving spouse without the need for probate.

In general, all that the surviving spouse will need to do is produce a death certificate or record one in the appropriate land records to confirm their ownership of the property. Tenancy by entirety is often abbreviated as TBE.

Community Property

Community property is a type of joint ownership that is recognized in some states and can only exist between a husband and wife. Each spouse's ownership rights in community property are set by specific state laws.

Tenancy in Common

With this type of joint ownership, each individual "tenant in common" owns a specific percentage of the property and can withdraw, mortgage, or sell their own separate piece of the property.

When a tenant in common dies, their share of the property passes to their own beneficiaries and not to the surviving tenants in common. Tenancy in common is often abbreviated as TIC or TEN COM.

Ownership by Contract Rights

Ownership by contract rights (otherwise known as title by contract) covers payable on death (POD), transfer on death (TOD) accounts and deeds, in trust for (or ITF) accounts, Totten trusts, life insurance, retirement accounts including IRAs and 401(k)s, annuities, life estates, and revocable living trusts.

The owner of the property has full control of it during life (with the exception of life estates—check applicable state law). After their death, the property passes outside of probate to the beneficiaries designated by the owner. 

In general, the beneficiary will need to produce a death certificate or record one in the appropriate land records to claim ownership of the property.