Survivorship rights: Important considerations in real estate closings.

When two or more people own real estate, either as joint tenants or tenants in common, each individual owns a share of the entire property. This means that specific areas of the property are not owned by any one individual, but rather they are shared as a whole.

Even though none of the owners may claim to own a specific part of the property, tenants in common could have different ownership interests. For instance, Tenant A and Tenant B may each own 25 percent of the home, while Tenant C owns 50 percent of the property as a whole. Tenants in common also may be created at different times; so an individual may obtain an interest in the property years after the other individuals have entered into a tenancy in common ownership.

Joint tenants, on the other hand, must obtain equal shares of the property with the same deed at the same time. When one owner dies in a joint tenancy, that owner’s interest in the property will pass to the surviving owner or owner’s by operation of law.

The terms of either a joint tenancy or tenancy in common are spelled out in the deed, title, or other legally binding property ownership documents. The default ownership characterization for married couples is joint tenancy in some states, and tenancy in common in others.

The default form of co-ownership in Texas, for example, is a tenancy in common according to the Texas Estate Code. When a party dies, their share of the property will pass either via their will, or according to the intestacy statute if the party dies without a will. Each party may freely sell, devise, lease, or otherwise transfer their interest in the property. Tenancy in common does not contain a right of survivorship.

Absent explicit language to the contrary, co-ownership of property in Texas is presumed to be a tenancy in common. This means if a spouse passes away and the couple owned the property in Texas, the remaining share of the property does not automatically pass to the living spouse, unless there is an agreement that specifically states it.

When a couple acquires property together in a state like Texas, and intend to have survivorship rights, it is important to include a survivorship agreement as permitted under §112.052 of the Texas Estate code. The survivorship agreement should explicitly state that “the property will pass to, become the sole property of, and immediately vest in, the surviving Party upon the death of one of the Parties hereto, without the need for any probate proceeding with regards to the Property.”