How Should You to Take Title?

If you’ve ever bought a piece of property with another person* (for example, your spouse), chances are your closing attorney asked you, “How would you like to take title?”.  When attorneys ask this, we’re trying to determine how you want to own the property with the other person and, importantly, what you’d like to happen to the property upon your death.  The deed – the recorded document that establishes ownership of the property – will establish how ownership is held.  Here are the two most common ways to hold title in South Carolina:

Tenants in Common – Unless the deed states otherwise, “TIC” is the default way title is held.  With TIC, unless percentages are defined, each person owns 50% of the property.  Each owner can sell their ownership interest in the property at will, without having to get approval from the other owner.   A pitfall of TIC is that, when an owner dies, that owner’s share of the property will have to go through the probate process.  This can tie up the property for months or even years, a big inconvenience if the surviving owner wants to sell.  For example, if Bob and Mary own the property as TIC 50/50 and Bob passes away, Bob’s share will have to go through probate.  Mary may be entitled to the property depending on Bob’s estate planning (or intestacy laws, if he died without a will), but her ownership would not be automatic upon Bob’s passing.  TIC is often the preferred way to hold title for unmarried people. 

Joint Tenants with Rights of Survivorship – “JTWROS” requires that specific language be included in the deed.  When people own property as JTWROS, both people are entitled to 100% of the property.  One owner cannot sell the property (or any portion of the property) without the approval of the other owner. With JTWROS, ownership automatically transfers to the surviving owner(s) when one person dies.  For example, if Bob and Mary own the property as JTWROS and Bob passes away, Mary will automatically be the sole owner of the property.  That’s why JTWROS is often the preferred way to hold title for married couples.  That said, if you want your ownership in the property to go to someone other than your spouse upon your passing, this isn’t the option for you.      

Hopefully this will help you to be better prepared next time you’re asked how you’d like title to be held.

*For purposes of this blog post, I have assumed both owners are people, rather than entities.