CoOwnership in Missouri

1
Co-Ownership in Missouri

• Tenancy in Common
• Joint Tenancy
• Tenancy by the Entirety

Most common law jurisdictions recognize tenancies
in common and joint tenancies, and some also
recognize tenancies by the entirety.

• Missouri does NOT have community property
• Community property is all property acquired
  during marriage (except for gifts and
  inheritance). Each spouse has an equal share in
  community property regardless is one spouse
  earned more of the money to acquire it.
• Nine states have community property Arizona,
  California, Idaho, Louisiana, Nevada, New Mexico,
  Texas, Washington, and Wisconsin

2
Tenancy by the Entirety

• Only for wife and husband
• Right of survivorship (ROS)
• No right of partition (must get spouses consent
  in order to divide the property)
• No right to pledge TE share as collateral (must
  get spouses consent)
• Creditors do NOT have right to attach their
  debtors TE share, unless both spouses have
  signed the loan papers

3
Tenancy in Common

• With tenancy in common, two or more persons hold
  undivided interests in the same property with no
  right of survivorship for the surviving tenant in
  common.
• Each tenant in common has the right to transfer
  his proportional share by
• selling it
• giving it away, or
• transferring it to persons of his choice at his
  death.
• If the title to real estate is held by persons as
  tenants in common, all co-tenants have equal
  rights to manage and live on the property.

4
Tenancy in Common

• No right of survivorship (ROS)
• Right of partition any TIC co-owner can get
  judicial partition
• Any two or more persons (can be husband and
  wife, corporations, partnerships, trusts)
• Right to pledge TIC share as loan collateral
• Creditors have right to attach debtors TIC
  interest (share of the co-owned property)

5
Example of Tenancy in Common

• Dan and Sam own a business as tenants in common
• If Dan dies, his interest passes to his wife and
  children, not to Sam
• Either Sam or Dan may sell his share

6
Joint Tenancy

• Joint tenancy is one of the most popular and
  least understood means of owning property
• After a couple marries, they generally place
  property in joint tenancy.
• Joint tenancy with right of survivorship is a
  form of co-ownership in which two or more persons
  own the same property subject to the other joint
  tenant's ownership right.

7
How do you create a joint tenancy?

• Typical wording in the deed used to create a
  joint tenancy may be To Sarah Berlitz and Jason
  Owens, and to the survivor of them, and his or
  her heirs and assigns as joint tenants, with
  rights of survivorship, and not as tenants in
  common.

8
Joint Tenancy

• When a joint tenant dies, his economic interest
  automatically passes to any surviving joint
  tenant or tenants
• The deceased joint tenant cannot leave his
  interest to a devisee in a will nor does his
  interest pass to heirs by intestacy

9
Example Joint Tenancy

• Ron and his brother Don own land as joint
  tenants. Ron dies with a will leaving his
  interest in the joint tenancy property to his
  son.
• Don receives Ron's interest in the land as
  surviving joint tenant.
• Ron's son would not inherit his father's interest
  in the land.

10
Joint Tenancy

• Right of survivorship (ROS)
• Right of partition
• Right to pledge JT share as collateral
• Any two or more persons
• Creditors have right to attach debtors JT share
• Must be expressly stated, or else the law
  presumes co-ownership to be TIC (except for land
  by spouses is presumed to be TBTE)

11
What happens to creditors when a joint tenant
dies?

• Debtors cannot protect themselves from creditors
  claims by taking title to property in joint
  tenancy.
• The creditor has every right to attach the
  debtors interest in jointly held property and
  force a partition.
• However, if the joint tenant dies before the
  creditor seizes that tenants interest then the
  creditor loses his or her interest because the
  surviving tenant takes the property free from the
  claims of the decedents creditors.
• On the other hand, a creditor of the surviving
  joint tenant has substantially increased his or
  her security.

12
Which is better JT or TIC?

• Is it best for a parent and children, brother and
  sister, or unrelated individuals to hold title to
  real or personal property (e.g., stocks and
  bonds, checking and savings accounts, homes, or
  farms) in joint tenancy with right of
  survivorship?
• The correct answer is not a simple "yes" or "no."
  
• What is best for one family or situation may not
  be right for another family or situation

13
TC or JT?

• Interests in property held under a joint tenancy
  must be held in equal shares.
• Interests under a tenancy in common can be held
  in unequal shares.

14
Exception Bank accounts are tenancy by the
entireties if owned by husband wife
15
Unintended Consequence 1

• By holding property in joint tenancy, a family
  could be disinherited.
• The right-of-survivorship characteristic trumps
  whoever contributed to buying the property or
  what the deceased co-owner might have wanted to
  happen in his will)
• Example Two brothers, Roger and Paul, own land
  as joint tenants with right of survivorship.
• Upon the death of one, the survivor automatically
  receives the decedent's interest.
• If Roger dies, Paul receives Roger's interest in
  the land.
• Roger's wife and children do not inherit, because
  their names are not included in the deed.
• If Roger had left a will stating that his
  property was to go to his wife, the joint tenancy
  deed has priority. His wife would not inherit his
  interest.

16
Unintended Consequence 2

• If a parent holds title to real property in joint
  tenancy with his children, the parent loses
  complete control over his property.
• The parent can sell his interest, but it's
  doubtful if anyone would buy it under such
  circumstances.
• Example Jane, through efforts of herself and her
  husband (now deceased), owns her home outright.
• To save probate costs, she placed the property in
  joint tenancy with her daughter.
• Jane wants to sell the home because she is going
  to remarry and move to Florida.
• Jane's daughter, "for her mother's own good,
  refuses to sell.

17
Unintended Consequence 3

• Hard feelings may develop if only one child's
  name is included on the property deed and other
  children are excluded.
• Upon death of the parent, the property goes to
  the surviving joint tenant.
• The other children are "disinherited.
• Example Mrs. Jones placed title to the farm with
  her son thinking he would share with his sister
  after their mother's death.
• The son refused to give a share of the property
  to his sister when their mother died.
• Legally he is not required to do so.