There are various forms of real estate ownership that come into play when property is sold or passes through probate. The type of ownership will determine if and how property will be passed to heirs. In some situations with two or more owners, the percentage of property owned by an individual would be passed to his heirs. This would result in current owners sharing the property with the heirs of the deceased. It is important to understand the differences in forms of ownership before purchasing real estate with someone else.
An individual has sole ownership when she is the only owner of the property. That individual will be the only one who needs to sign for real estate to be transferred, and the property will pass to that individual's heirs upon her death.
In joint tenancy, each owner has an undivided interest in the property with the full right to occupy and use all of the property. Joint tenancy creates a right of survivorship, meaning that if one owner dies, the other owners automatically obtain the deceased owner's interest. If two people own a property in joint tenancy and one dies, the other becomes the sole owner.
With tenancy in common, each owner owns a share of the property. Unlike joint tenancy, there is no right of survivorship. The shares can be of equal or unequal size and can be freely transferred by sale or through probate. All owners have the right to occupy and use all of the property, even though the shares may be unequal.
Recognized by most states, tenancy by the entirety is available to married couples only. It is a type of shared ownership in which each person owns an undivided interest in the property with the right of survivorship. In this situation both owners have the full right to occupy and use the property. Interest in the property cannot be transferred by a tenant by the entirety without the consent of the other spouse.
A life estate is interest in land that only lasts for the life of the interest holder. It is created by a deed that gives the property to an individual for life and identifies what should happen to the property when that individual dies. The holder of a life estate cannot leave the property to anyone in a will. The holder must also refrain from engaging in waste, or any activity that would prevent someone from putting the property to full use.