UNDERSTANDING TYPES OF PROPERTY OWNERSHIP IN MISSOURI
In my last article, I discussed the different types of deeds which can convey real property. This article focuses on the different types of property ownership in Missouri.
Property can be owned solely by one person or organization, or ownership can be shared by more than one party. Sole ownership is obviously the simplest, most straightforward type of possession. The sole owner has the rights to the property within limitations of the laws (such as vehicle registration or zoning), and there is rarely any question raised when these rights are exercised.
One form of co-ownership is tenancy in common where each party or tenant has separate and distinct property interests. Each tenant in common has a fractional interest in the property. The amount of the fractional interest is the percentage of the total value of the property that the individual paid, or received as an inheritance or gift, when the tenancy was created. For example, if property was purchased for $50,000 and one of two tenants in common paid $20,000 in cash and mortgage payments, then his or her fractional interest is 40 percent. Each tenant in common is entitled to the income that his or her fraction of the property generates. Tenants in common owners may dispose of their interest as they wish. When one tenant dies, the interest of a tenant in common passes according to their will (or the law of intestate succession if there is no will). The property does not automatically revert to the survivors.
Another form of co-ownership is joint tenancy with right of survivorship. This is created by a deed if the property is land. The joint tenants own the same interests arising from the same conveyance of title such that each has an undivided or undesignated interest in the jointly owned property. Each has a right to use the property and a right to any income generated by the property as well. When one joint tenant dies, the survivor automatically acquires full ownership of the property. If more than two people are joint tenants with right of survivorship, the remaining individuals share the property; no third party will take the decedent’s share.
This ownership arrangement acts like a will substitute because the property will automatically belong to the survivors, avoiding probate. A joint tenancy that can be used only by a husband and wife and only with real estate is a tenancy by the entirety with right of survivorship. Like other joint tenancy property, upon death of the first spouse, property in tenancy by the entirety is passed on to the surviving spouse. Tenancy by the entirety property cannot be severed without consent of both the husband and wife. Divorce severs the tenancy, however.
