When you own a piece of property, a few different methods of ownership can be used. One of the most common ways that property is held is in a joint ownership agreement. With this type of agreement, more than one party holds ownership rights to the property and can use it.
Joint Tenancy Agreement
One type of joint ownership agreement that multiple individuals can enter into is a joint tenancy agreement. With a joint tenancy agreement, more than one person owns a piece of property. The owners of the property own it equally among each other. With this type of tenancy, a right of survivorship is included in the contract. This means that when one owner of the property dies, the remaining owner or owners can have full ownership of the property transferred to them without having to worry about going through probate.
Another type of agreement that multiple parties can use to hold the piece of property is a tenancy in common agreement. With this type of agreement, each owner of the property can pass her share of ownership on to a beneficiary by using a will. When the owner of the property dies, the property must go through probate before it can be passed on to the other party. With this type of ownership the property can be owned in unequal proportions.
When you enter into a joint ownership agreement with another individual, it is important to make sure that you outline all of the terms of the agreement. For example, if you enter into a tenancy in common agreement, you could have different ownership percentages for each owner. In the agreement, it is important to determine what percentage each owner has in the property. This way, if the property is sold, the appropriate percentage of the funds can be distributed to each party.
Some property owners use joint ownership agreements as a way to help their beneficiaries avoid probate in the future. For example, some parents set up a joint ownership agreement on a piece of property with a child. This way, when the parent dies, the ownership of the property will transfer automatically to the child without first having to go through the probate process. This can save time, and it is much easier for the beneficiary to inherit the property this way.