Major Changes Proposed for the Liquor Control Board

Pardon v. Expungement

Queen's English - Historically Speaking

Have A Will, Keep It Current

Latin Lovers Meets Truth or Consequences

Using Experts in Personal Injury Cases

We Have a Tax Code. Yea! Boo!


Avoiding Collection Problems

What are the Statutes of Limitation?

Oral Modification of a Written Lease

Creditor Beware - Preferences in Bankruptcy

Latin Lovers 2010

Your Right to Know

Woodman, Spare that Tree!


Do's and Don'ts when Ponzi Knocks

The New Law on Home Improvements

PA Lawmakers Help Developers by Extending Permit Deadlines

The Roth IRA Conversion Window- - for You?

Unemployment Compensation - The Basics

Presume At-Will Employment with Exceptions

The Queen's English The Verbs To Lie (down) and To Lay


There's No Place Like Home (For Your Business)

Protecting Our Hershey Bar!

Time to Buy (or Sell) a Business?

Reminder: Some 2010 Income Tax Credits

A Night Out Turns Lethal - - Whose Fault?

Severance Packages and the Age Discrimination in Employment Act


The Terri Schiavo Story Five Years Later, Still an Avoidable Tragedy

Winning Before Trial: Summary Judgment

Can't Get No Satisfaction...(At Least Without Legal Assistance)

The Queen's English -- Which-Hunting

Curb That Frisky Pup!

Significant New Tax Incentives for Employers


Joint Ownership and the Consequences

When is a Worker an Independent Contractor or an Employee

An Irrepressible Tide, Pardner!

Employee Claims and Bankruptcy

Joint Ownership of Bank Accounts

Cell Phone Records and the Fourth Amendment

Haiti Charitable Contributions Deductible for 2009















Joint Ownership and the Consequences

When two or more people acquire title in real or personal property (other than in an entity such as a corporation, partnership, or limited liability company), they too often give little thought to the type of ownership.  The consequences can be dire.
There are three types of joint ownership: tenancy by the entireties where the parties are spouses (with survivorship); tenancy in common (without survivorship); and joint tenancy (with survivorship).  "Survivorship" simply means that if one of the co-owners dies, the surviving party (or parties if more than two) becomes the owner outright of the property; correspondingly, if one owner dies without survivorship, his or her interest passes not to the co-owner but to his or her estate.
Very often (too often!) the intention of the parties when they acquire an asset is not clearly expressed.  In Pennsylvania, if the parties are married, unless they manifest a contrary intent, they become tenants by the entireties, and if one dies, the other owns the entire asset.  Another rule in Pennsylvania is that where unmarried parties acquire an asset jointly, and there is no manifestation of intent to the contrary, the (rebuttable) presumption is that they intended to own it as tenants in common; and if one dies, his or her undivided one-half (if there are two) interest passes not to the surviving co-owner but to the estate of the decedent.  In that case, the surviving co-owner may suddenly have several co-owners he or she never dreamt of (as opposed to owning the asset alone if it had been a joint tenancy); often this can severely alter the plans of the surviving co-owner for the development of a property.
A further complicating factor is often the total lack of documentation.  With real estate, there is almost always a deed at least, but often it will identify the grantees as "A and B" with nothing more; in that case A and B are tenants in common.  The same rules apply to personal property.
Our financial institutions have often contributed to the uncertainty by having a document which opens an account in joint names without specifying whether it is a tenancy in common or joint tenancy.  Even worse, at times the document will specify which it is, but the bank person assisting in opening the account fails to call to the attention of the joint account owners which it is.  Much more often than not the owners of the account do not know of the difference and never think to ask the bank official which it is.  (Too often bank employees do not fully understand the differences in the types of ownership.)
A very common circumstance is the widow who opens a joint account with a child, expecting the child to be the owner of the account on the widow's death.  But if the account card does not specify which it is, the presumption is that it is a tenancy in common (without survivorship), so that on the widow's death, half of the funds in the account go to the widow's estate, not to the joint owner of the account, often contrary to the widow's expectations.
When parties acquire an asset jointly, unless they clearly manifest an interest to the contrary, the co-owners will own equal shares (two, a one-half interest each; three, a one-third interest; etc.).   In the event of a dispute between co-owners, a very common occurrence, either co-owner may ask a court to partition the asset; i.e. he or she can ask the court to order a sale, and the proceeds will be divided among the owners prorated according to their respective ownership interests.
It is possible for a joint tenant to convert his or her interest to a tenancy in common simply by conveying the interest to a third party, but a recent New York case illustrates the risk of delay where a joint tenant does not want the owner to have survivorship.  There (Orlando v. Deprima) the joint owner petitioned the court to order partition (instead of conveying her interest to a third party); and before the court formally ordered the partition to occur, the petitioner died.  The court ruled that the mere filing of the filing of the petition alone did not terminate the joint tenancy; therefore, the co-owner became the sole owner of the property, no doubt to the everlasting chagrin of the decedant's heirs.  The New York ruling seems to be consistent with that of most other jurisdictions.
The point made in the Orlando decision was that once a joint tenant decides to terminate the right to survivorship of his or her co-owner, he or she cannot move quickly enough; a simple transfer to a third party does it.  Of course the elimination of survivorship by conveyance of a joint tenancy interest could work against the interest of the grantor as the other owner might die unexpectedly shortly after the conveyance is completed, instead of becoming owner of a 100% interest in the property, the grantor remains a 50% owner, and the decendent's estate receives the other 50%.  Beware what you seek!
Co-ownership is something of a legal minefield, and we cannot stress enough the importance of complete documentation on the acquisition of a major asset with a co-owner.  You will want to specify not only whether it is a tenant by the entireties, tenancy in common, or a joint tenancy; additionally, the percentage interests of each co-owner should be specified, and it would serve well to put limitations on the sale of an interest by any co-owner (a buy/sell agreement).  Above all, be specific and reduce it to writing!  The legal battleground is littered with cases involving co-ownership, most of which would have been avoided with clearly written agreements.
-  Ken Butera






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