Tenancy by Entirety allows a couple to own one or many properties together as a single entity in terms of the law, not unlike community ownership. This is one of the fiscal advantages of marriage. It’s easy to create and transfer titles between spouses.
Another advantage is that creditors can’t sell or attach the interest of a spouse with debt. Only lenders of the couple can sell or attach interest owned by tenancy by the entirety. This policy applies in about half the American states to every kind of property, and a small amount of states reserve the policy for real estate only.
There are three different kinds of concurrent ownership, and each kind affects each person’s ability to use their property as collateral and rights of property transfer.
Tenancy by entirety, which can only be entered into by married people. A couple can choose whether to create a tenancy in common or a joint tenancy. It is usually assumed that a married couple will take property title as tenants by the entirety in most states. The exception is only if the conveyancing document or deed states otherwise.
The crucial difference between a joint tenancy and a tenancy by the entirety is in case of tenant by the entirety either one of the spouses is not allowed to give away or sell his or her property interest with the consent of his or her spouse. If one of the spouses was to die, their interest in the property would be passed along to the living spouse, and not to the family or heirs of the deceased, even if that preference was stated in the deceased person’s will. This policy is called right of survivorship.
For example, let’s say Sam and Jenna own an estate and a summer house. Both are held managed and owned by a tenancy by the entirety. This means that Sam can try to give away or sell the summer house without Jenna’s signature.
This also means that if a tax lien was to be placed on one of the spouses, the other may be found to be responsible for the debt as well.
Tenants in common and right of survivorship do not apply with one another. In a tenant in common arrangement either spouse can gift or sell their property interest. If a tenant sells her joint tenancy interest, then the tenancy evolves into a tenancy in common, and neither tenant is endowed the tenancy after the other tenant’s death. A tenancy in entirety can’t be changed to a tenancy in common or a joint tenancy by a property conveyance. Either a marriage annulment, a divorce, or an amendment to the property title has to take place to dissolve a tenancy by the entirety.
Definition of Tenancy in Partnership
Tenancy in Partnership refers to two or more people joining together voluntarily in a business partnership, with an agreement to jointly accept profit or loss.
Explanation of Tenancy in Partnership
When two people enter into a tenancy in partnership agreement, it means that they are both will to contribute labor, skills, good, and money to carry on as a commercial initiative. A necessary component of this kind of partnership is the explicit intent to increase profit. The idea here is that the whole is more valuable than all the parts individually. Tenancy in partnership has legal implications as to the rights of each partner as well as how it may be handled in court.
Tenancy in partnership is made up of the partners and the partnership itself. The partnership is actually of higher legal importance than the value of either partners, which means that the partnership is its own entity. Partners will have partnership asset interest and in his or her share of surplus and profit.
There are several questions that are important in relation to partnership:
– What happens to ownership if a partner dies?
– Is assigning rights a legal right of either partner?
– Can a creditor claim an ownership right in the partnership?
– What are the specifics as to ownership for partners? What do they own?
– Do their families have rights in regards to the partnership?
There are basically three different ownership interests.
The first is ownership, which is not unlike personal property. The second is managerial, which is put into action through voting, and the third is economic, which is the right to participate in the partnership and share in the surplus and profit.
In regards to ownership; a partnership is an entity larger than the sum of either partner. This entity is worth more than either skillset the partners and is thus worth more because it also includes each partner’s share. The assets of the partnership are tied to the partnership itself, and not to either individual partner. If one of the partner dies, the other has right of survivorship. This means that the partner has rights even before family members.
Managing the partnership is also a form of ownership in this context. The specifics of this are totally dictated by the stipulations of the partnership agreement.
Partnerships are voluntary and it’s important to be selective when choosing partners. This is why partnership agreements tend to prohibit current partners from assigning his or her rights to a third party. In summary, a partner can’t use his interest to assign partnership property without the consensus of all of the partners included in the partnership.
This is because none of the partners actually own any physical property associated with the tenancy in partnership; the partnership does as its own entity. Partners only own a right of participation, and a right to possess the property, which are both equally distributed among them.