What are the various ways to hold title in Maryland?
Tenants in Common
Tenants in common contains no survivorship. When one owner passes away, their property passes through their estate to their respective estate beneficiaries. Each person owns their proportionate share of the property. By default, proportionate share would be divided up by the number of people who own the property. However you may designate different percentages of ownership in the deed. For non married people, property is presumed to be held as tenants in common. A creditor of one property owner can easily attack that owner’s interest in the property.
Joint Tenancy includes the survivorship feature. When one joint tenant passes away, the remaining owners automatically inherit the property. To create a Joint Tenancy, each joint tenant must have equal unities of Time, Title, Interest and Possession. Therefore, the interests of all joint tenants have to vest at the same time and must be equal. There is a deed drafting presumption against Joint Tenancy, therefore, the language in the deed must be explicit. Normally, the words “as joint tenants with right of survivorship, and not as tenants in common” would be included in the deed to create the Joint Tenancy. Even if correctly set up initially, Joint Tenancies can be broken. If the Joint Tenancy is broken, all of the parties become tenants in common. One of the ways Joint Tenancies are broken is by one of the owners filing bankruptcy. Judgment creditors can execute on a property to attach a joint tenants interest in a property.
Tenants by the Entireties
Tenants by the Entireties is for married couples only. Engaged people may not be Tenants by the Entireties prior to the marriage date. Survivorship applies when one spouse passes away. This is the best form of ownership for asset protection where one of the spouses may have individual creditors. Individual spouses may not convey their individual interests in the property (including executing mortgages) without joinder of the other spouse. When a husband and wife initially take title, it is presumed that they will be Tenants by the Entireties. However, individuals who are joint tenants and subsequently marry after taking title do not automatically become Tenants by the Entireties. Divorce automatically severs Tenants by the Entireties and the parties become Tenants in Common.