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When two or more people purchase a piece of property together, they often have questions about how that will play out upon the death of one of them.

In New York, multiple owners may take title in one of three ways: as tenants by the entirety, joint tenants or as tenants in common. Each tenancy carries its own benefits and consequences.

Tenancies by the entirety are distinguishable in that they are permitted only between husband and wife. As tenants by the entirety, husband and wife both, and each, own the whole, undivided interest. As a result, upon the death of one, title to the property automatically transfers to the survivor. This is known as the “right of survivorship” or “last man standing” principle. This form of ownership is only terminated by death, divorce or annulment.

Although each tenant may sell, mortgage or otherwise encumber his or her rights in the property, the conveyance is subject to the right of survivorship of the tenant by the entirety. For example, a purchaser of an entirety interest may be left with no interest at all if the selling spouse dies first since the surviving spouse takes all. Similarly, a judgment creditor’s lien against a deceased tenant by the entirety is not a valid and enforceable lien against the estate of the surviving tenant after the survivor’s death.

Joint tenants take title similarly to tenants by the entirety — the salient characteristic is the right of survivorship. The most common example of joint tenancy is when parents transfer ownership of property into the names of their children to keep it in the family. Upon the death of one child, his interest will automatically pass to his siblings instead of passing into his estate.  If there are four children, for example, upon the death of one, the remaining three will have a 1/3 interest in the property and so on, until only one child remains with the entire interest. The downside to this is that the property will ultimately end up in the hands of the last child’s estate; the beneficiaries of the other children will never benefit from that property interest.

That leads us to tenants in common. Here, the greatest difference is the lack of “right of survivorship.” Unlike joint tenants, upon a co-owner’s death, her interest passes into her estate and will be distributed according to her will. Essentially, the estate is substituted as the owner of that interest instead of it passing to the other original owners; the interest of the remaining owners is unchanged. A tenancy in common protects the interests of the owner’s beneficiaries.

There are pros and cons to taking with rights of survivorship; knowing the difference is beneficial in making the decision that best accomplishes the owners’ goals.

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