People often own property in some form of co-ownership with another person. The most common situation is a husband and wife, although there can be a number of reasons why persons who are family members or investors register their names together on title. This can sometimes create major legal and financial issues. 

There are different forms of co-ownership – the most common being “joint tenancy with right of survivorship” and “tenancy in common.” Joint tenancy with right of survivorship means that upon death of one owner, the survivor automatically assumes ownership of the entire property by what lawyers call “operation of law”. The deceased’s share does not go into his or her estate but rather passes directly to the survivor. This means that the beneficiaries or heirs will not be entitled to the deceased’s interest in the property. 

Tenancy in common is somewhat different. The right of survivorship does not attach to a tenancy in common. As such, where a tenancy in common has been created prior to the death of an owner, his or her interest in the property will not pass to the other owner(s), but will form part of the former’s estate and distributed accordingly. 

If the legal effect of a joint tenancy ownership is not what you intended when you made the joint tenancy arrangement, then you may consider tenancy in common. The legal process of converting a joint tenancy arrangement into a tenancy in common is referred to as “severance”. There are a number of ways to convert joint tenancy into tenancy in common. A few examples include:

•  One owner assigning or conveying his or her right or interest (either to himself/herself or to a third party); this can be done without the consent of the other joint tenant;
• By agreement between the joint tenants, either expressly or implicitly (such as a separation agreement, certain mutual wills);
• By application to a court for partition or sale; every co-owner has the right to apply to court under certain circumstances to have the relationship with the co-owner dissolved and the property sold;
• By assignment into bankruptcy for the benefit of creditors;
• By declaring that the property is held in trust for someone else or granting someone else a life interest in the property.

There are of course any number of factors that relate to each of the above possibilities for severing a joint tenancy which require legal analysis. The main point, however, is to generally recognize the benefits and burdens of each type of co-ownership and understand that the ownership relationship may be terminated for any number of reasons.