Below are a few methods for establishing ownership of real property, such as houses and land, and personal property like bank accounts, cars, and other items.
When the owner dies, ownership can pass to another via beneficiary designation or into the decedent’s estate. The person(s) entitled to inherit is controlled by the accounts titling, the decedent’s Last Will & Testament or, if none exists, by statute.
T/E evolved from English common law and creates a legal fiction. In a T/E, when the first spouse dies, the surviving spouse owns the property in his/ her name alone. Such ownership treats a husband and wife as one owner rather than two individuals. As a result, both spouses’ signatures are required to sell the property. (One spouse cannot act independently of the other).
This can also protect the assets owned by married persons from the debt of an individual spouse. For example, if the wife defaults on a car loan in her name alone, the creditors cannot normally go after the house titled in both the husband and wife’s names. There are certain exceptions to the above scenario including when the U.S. Supreme Court upheld the IRS seizing property owned by spouses as T/E, even when only one spouse has an unpaid tax debt or lien.
If one co-tenant dies, his or her ownership interest passes into their estate, and not to the surviving owner(s). Under T/C, owners can also possess unequal shares, such as a 65/35 split. In Maryland, unless the owners are married or the asset is titled to establish JTWROS (see below), ownership of property is presumed to be as tenants in common.
However, there is a presumption in Maryland against joint tenancy. The intention to create a joint tenancy must be explicit. Therefore, the asset titling must include language that establishes rights of survivorship for non-married individuals. The significance of this language is that when one owner dies—by operation of law—his or her share is owned by the surviving owners.
It is also important to remember that because each joint owner possesses an undivided right to possess the entire asset, each joint tenant has the right to conduct all business therein.
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
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