Question

8) Martha and Layla have been a couple for many years but are not married. They purchase a home in Fairfax County and prior to settlement, the title company which is handling the settlement inquires of them as to the wording of the deed. Specifically, do they wish to be joint tenants or tenants in common. The couple are in their early forties and do not expect to have children. Layla has no close family; no siblings and her parents are deceased. Martha has a large family. Her parents are living as are her five siblings and Martha has a number of nieces and nephews. Neither Martha nor Layla has a will. Knowing that you have just taken a Business Law course, they ask you whether they should take title the house as joint tenants or tenants in common. What is your advice?

Answer 1

Step-by-step explanation:

The two common ways to hold property jointly are as joint tenants with rights of survivorship or as tenants in common. Here's a brief explanation of both options:

1. Joint Tenancy with Rights of Survivorship (JTWROS): In this form of ownership, if one owner passes away, their share of the property automatically passes to the surviving owner(s) without going through probate. This option is often chosen by couples or co-owners who want to ensure a seamless transfer of ownership upon the death of one of them.

2. Tenancy in Common: With a tenancy in common, each owner holds a distinct share of the property, which can be equal or unequal. If one owner passes away, their share will not automatically pass to the other owner(s). Instead, it will be distributed according to their will or, if they do not have a will, the laws of intestacy in the state.

When deciding between joint tenancy and tenancy in common, Martha and Layla should consider several factors:

1. Estate Planning: If they want to ensure that the surviving partner automatically receives the deceased partner's share of the property, they may opt for joint tenancy. This can provide a simpler transfer of ownership without the need for probate. However, it is essential to consult an attorney to ensure this aligns with their overall estate planning goals.

2. Inheritance: If Martha wants her family members (parents, siblings, nieces, nephews) to inherit her share of the property in the event of her death, tenancy in common may be more appropriate. It allows for more control over the distribution of her share according to her wishes or the laws of intestacy.

3. Financial Considerations: Martha and Layla may need to consider financial and tax implications associated with each form of ownership, such as capital gains tax or potential gift tax implications.

It is crucial for Martha and Layla to consult with an attorney who specializes in real estate and estate planning to assess their specific situation, consider their goals, and provide advice based on Virginia law. This will ensure that they make an informed decision and properly protect their interests.