Joint Tenancy and Spouses: Understanding SC Law

In South Carolina, you have the right to title assets in several ways. Title assets include real property, bank accounts, car titles, and more.

Today’s post will not detail ALL of the various ways we can hold a title but will discuss two different types of joint ownership and how they can be used to hold property with a spouse.

The two types of joint ownership we are covering include:

  • Tenancy In Common
  • And Joint Tenancy with Right of Survivorship

To simplify this concept, we will use in this post the example of a deed to a marital home worth $200,000.

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What Is Tenancy In Common?

Let’s begin with tenancy in common. Tenancy in common is the legal term for ownership held by two or more people where each owner has an undivided interest in the property. In our example, this means that if Husband and Wife hold their $200,000 home in a tenancy in common each of them is a 50% owner.

Under this type of ownership, if the Husband dies first, his 50% (roughly $100k of equity) will pass through his estate. If the Husband has done proper estate planning and left a valid Last Will and Testament, chances are that this will not be a problem as he likely leaves his 50% back to his Wife so that she ultimately owns 100% of the marital home.

If, however, he failed to leave a will, his 50% will be passed through the laws of intestacy (we’ve explained this in a previous post) and the Wife will end up sharing the home with other heirs. This can be a disaster if the other heirs are his children from a previous marriage, their children who are still minors, etc.

This can also be a nightmare if the Husband dies with significant creditors as they can attack the 50% interest in the home in an attempt to collect on his debt. For these reasons, we commonly suggest to our married estate planning clients that they consider the next form of ownership, Joint Tenancy with Right of Survivorship.

What Is Joint Tenancy with Right of Survivorship?

Joint Tenancy with Right of Survivorship is a mouthful, but when understood and used properly it can be a huge benefit to South Carolina residents to protect their assets from creditors, etc. Certain language included in a deed can create a “joint tenancy with a right of survivorship” or JTROS.

In this form of ownership, if the Husband dies first, his 50% passes immediately to the remaining owner (i.e. the “survivor” of the tenants takes it all) and it does so without:

  • Passing through an estate
  • Going through probate
  • Or anything else

It’s “automatic.” Now, there is a list of circumstances beyond the scope of this post where this doesn’t work (more than 2 owners, one joint tenant kills the other, etc.) but for the most part, this is a great piece to your estate plan.

Remember that our example used a marital home but these rules can apply to almost any form of property that is titled including:

  • Cars
  • Bank accounts
  • Retirement accounts
  • And more

Also, remember that other factors must be considered when choosing a form of ownership. For example, a couple may choose not to title an asset in one spouse’s name if they have outstanding liens or judgments against them.

Next Steps

Using these forms of ownership is a great estate planning tool in South Carolina. David Causey, an attorney in our office, offers both reduced consults and flat fee deed preparation to help you take advantage of these options.

If you’re unsure how your assets are currently titled, it's wise to determine that by:

  • Getting a copy of your deed
  • Contacting your bank
  • Reviewing your car title, etc.

Once you know how all of your assets are titled, an estate planner can better assist you in understanding how all of these pieces come together to form a solid estate plan. One last warning, and it’s a big one, while these are excellent tools to use with your spouse, they can have disastrous outcomes when used with children. We’ll cover that in an upcoming blog post!

Need a qualified lawyer for your probate matters in Summerville? Then give PMC Law Firm a call today at (800) 914-0620 to schedule your case consultation with a member of our legal team.