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Saturday, May 15, 2021

My Mom bought a house jointly so how can she leave it in her will?

Words don't always mean the same thing in law as they do in common English usage. This fact will always cause confusion. Here is an example of how the word "joint" as it applies to real estate can be misconstrued. This is a note from a reader, with my comments below.

"My mom just bought a house jointly with her cousin. She told me her lawyer told her they can both still leave their half of the house to their children if they have a will. She told me her lawyer said if they own it in common, if one of them dies, they can be forced to sell their half of the house or forced to sell the house if the person who inherited the other half chooses to sell. Is this true? Everything I've read says if you own jointly, you can't will it to your children. Can you own a house jointly and put in your will that your kids get your half after the cousin passes?"

What is happening here is a misunderstanding of the word "joint". People always use this word when there is more than one name on a title, but it isn't always correct. Your mother did NOT buy a house jointly with her cousin. She bought a house as tenants-in-common with her cousin. The fact that they both own the house does not make it joint. Sure, in common English language that makes sense, but not in legal terms.

What I love about your situation is that the lawyer who did the land transfer took the time to explain to the clients the consequences of the arrangement they were making. This is the only way for a lawyer to make sure that he or she is setting things up in a way that will suit the clients' goals. Your Mom has a good understanding of what she has gotten into.

If your mother had set up the title as joint owners, she could not leave it to her children in her will, just as your reading confirms (unless, of course, the cousin had already passed away). This is because joint ownership of property comes with a right of survivorship that automatically entitles the owner who outlives the other the right to own the property. However, tenants-in-common is very different. In that case, there is no right of survivorship. Each person owns a defined portion of the property and can give his or her piece  away in the will.

The part about being forced to sell the property is also correct. Tenants-in-common arrangements have their advantages and purposes, as do all different set-ups, but they can get tangly after the original owners pass away. Let's say, for example, that your Mom passes away and leaves her share of the house to her children. Now there might be, say, four people on the title. Then the cousin passes away and leaves his half to his children. Now there are, say, seven people on the title. By now, things are out of control. With that many owners, how do they agree on who will live there, whether it can be rented out, who fixes the damaged roof, who pays the property tax, who is to blame for nobody paying for insurance? In the end, it's often because of this kind of unworkable title that property ends up being sold. All of those people cannot realistically share one house. If all of the owners can't agree on what to do, one of them will take it to court and ask a judge to order it to be sold.

In a best-case scenario, one owner would buy out the others, assuming they can all agree on a price.

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