How should we hold title?

This is a fair question which arises when two or more people are going on title through the purchase of property.   In such cases, there are three options: joint tenancy, tenancy by the entireties, and tenancy in common.

Tenancy in common is the default form of ownership in Virginia when two or more persons are on title to the property. This is when two or more people own an equal or unequal undivided share in a property and each has an equal right to possess the entire property.   However, tenants in common do not have the rights of survivorship that exists in a joint tenancy.   When one co-owner dies, his or her interest will not pass to the surviving owner or owners but will pass according to his or her will or, if there is no will, to by the statutorily determined heirs.  

There is no creditor or judgment protection for tenants in common.   Liens and judgments against only one of the owners can attach to the defendant's portion of the property.   This can eventually lead to the entire property being sold to satisfy the lien or judgment.

Joint tenancy is when two or more co-owners take identical interests in the same property land, at the same time, through the same instrument and with identical rights to possession.   This form of ownership can only arise out of the acts of the parties, never by operation of law or descent. Recent developments abolished the common law presumption of a right of survivorship for joint tenants no longer exists; therefore, the right of survivorship must be expressly stated in the title document.   The failure to state the right of survivorship renders a right of survivorship changes the expressed joint tenancy into a tenancy in common.   With the right of survivorship, the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant.  

Joint tenancies can be severed.   Lien creditors can attach one joint tenant's interest in the property, making the entire property subject to partition.   Additionally, if the co-owners disagree over the use or disposition of the property, a costly and time consuming law suit may be required before either owner could exercise his or her intentions for the asset.

A special form of joint tenancy exists only for husband and wife, known as tenancy by the entirety.   This is a form of joint tenancy reserved especially for husbands and wives, and is based on the legal fiction that a husband and wife form one "whole."  Like joint tenancy, the parties must acquire their interest at the same time and through one title document. The right of survivorship is created through express language in the deed.   Both owners have an undivided interest in the whole property.   Tenancy by the entireties is different from a joint tenancy because one owner cannot unilaterally convey his or her interest in the property and the tenancy cannot be severed except by action of both parties.   Any attempts to sever the tenancy will be rendered void.  

The primary difference between tenancy by the entirety and joint tenancy is that joint tenants may deal with the property as they wish. If one joint tenant decides to convey her interest in the property, that interest is conveyed, and the joint tenancy is destroyed. In tenancy by the entirety, each tenant effectively owns the entire estate. Therefore, neither can deal with the property independently of the other. The main advantage of this difference is that judgment creditors of one party cannot enforce their liens against the property. If the debtor spouse dies first, the lien can never be enforced against the property. Of course, if the non-debtor spouse dies first, the lien could be enforced against the property.    

Lien creditors cannot attach only one tenant's interest to the whole until the tenancy is severed by either divorce or death.   There are two exceptions to this rule:   (1) A transfer of a property into a tenancy by the entirety made in contemplation of a bankruptcy can be set aside as fraudulent if it is made within one year of the bankruptcy and it was made with the intent to defraud; and (2) Any federal Internal Revenue Service lien liens applicable to only one spouse will attach to the property.