Joint Real Property in Michigan: Ownership Overview
In Michigan, joint real property ownership can take various forms, each with its unique legal implications and considerations. Some property owners seek joint ownership for estate planning purposes, and others for liability protection. Whether you're a prospective property buyer, a real estate investor, or simply want to understand the intricacies of property ownership, it's essential to familiarize yourself with the different types of joint ownership options available in the state. In this article, we'll delve into the most common types of joint real property ownership in Michigan to help you better understand this complex legal landscape.
1. Tenancy in Common (TIC)
Tenancy in common is a prevalent form of joint ownership in Michigan. When multiple individuals own property as tenants in common, each has an undivided interest in the property. This means that each owner can sell, lease, or transfer their share independently. In case of an owner's death, their interest passes to their heirs or beneficiaries, not necessarily the other co-owners. This type of ownership provides flexibility and is often used in investment properties or when parties want to maintain separate ownership interests.
2. Joint Tenancy
Michigan recognizes both Joint Tenancy and Joint Tenancy with Rights of Survivorship as distinct types of property ownership. In a joint tenancy, two or more individuals own the property together, and each owner has an equal share in the entire property. In other words, joint tenants both own 100% of the property, instead of each having their own 50%. This distinction of joint tenancy promotes both co-owners having to sign off on a future transfer.
3. Joint Tenancy with Right of Survivorship (JTWROS)
Joint tenancy with right of survivorship is another common form of joint ownership in Michigan. Under JTWROS, co-owners share equal ownership rights, and when one owner passes away, their share automatically passes to the surviving owner(s). This avoids the property going through probate and simplifies the transfer of ownership. It's crucial to note that the creation of a JTWROS requires clear and explicit language in the deed.
4. Tenancy by the Entirety
Tenancy by the entirety is a special type of joint ownership in Michigan available only to married couples. It combines elements of both tenancy in common and joint tenancy with the right of survivorship. Spouses each have an undivided interest in the property, and upon the death of one spouse, the surviving spouse automatically becomes the sole owner. This type of ownership offers certain legal protections, such as protection from creditors of only one spouse.
5. Community Property (Not Recognized in Michigan)
It's important to note that Michigan does not recognize community property ownership as some other states do. Community property is a system in which marital property is considered jointly owned by both spouses, with each having a 50% interest. Since Michigan follows the principles of equitable distribution in divorce proceedings, property acquired during marriage is divided based on what is deemed fair rather than a strict 50/50 split.
Conclusion
Understanding the different types of joint real property ownership in Michigan is essential for making informed decisions when purchasing or co-owning real estate. Whether you opt for tenancy in common, joint tenancy with right of survivorship, or tenancy by the entirety, it's crucial to consult with a qualified real estate attorney to ensure that your ownership structure aligns with your goals and that all legal requirements are met. Additionally, having a clear understanding of these terms can help you navigate the real estate market and make informed decisions that protect your interests.
This blog is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a property attorney about your case Contact Us at (734) 743-1646 to schedule a consultation.
