Legal Blog

Ownership in Real Estate: Don’t Be Surprised

From the Desk of Herb

Purchasing real estate can be one of the most significant financial transactions in your life. Therefore, you should take care in the legal implications of the manner in which the property is titled under the deed you receive at closing from the seller. Some deeds state one of the various types of joint ownership such as: joint tenants, joint tenants with rights of survivorship, tenants in common, tenants by the entirety, husband and wife, partners, etc. Whether the deed states nothing at all or otherwise designates the type of ownership, you or your heirs could be surprised by the result.

Consider two cousins who purchased an office building in a deed titled Bob Smith and Steve Smith, which later in the deed states they are “joint tenants”.

Bob dies several years later.  Under the state law where the property is located, Bob’s wife (Jane) was shocked to realize that Steve inherited Bob’s interest in the office building. Jane knew that  Bob had prepared his will leaving his interest in the office building to Jane.  Bob told his estate planning lawyer that he had purchased the building with his cousin as partners. Bob was wrong.

Even though the deed did not mention the concept of “with rights of survivorship” in favor of the surviving co-owner, state law implies survivorship rights in a “joint tenants” ownership designation. Because the property passed by operation of law to Steve as the surviving owner, Bob’s will had no control over the disposition of Bob’s interest in the property and as a matter of law, Bob selected an ownership arrangement with his cousin Steve as his beneficiary, not his family.

You need to get legal advice on how you should title your ownership in real estate and other assets.  If it is titled wrong, you can change it. So it is not too late to look at your real estate holdings, brokerage and bank accounts, automobiles and other “titled” assets.  Almost all deeds are readily available online. We would be glad to help you in any review.

 

We would be glad to discuss your customer credit agreements and documents with you.

Questions about purchasing real estate? Contact Herb Fineburg at hfineburg@offitkurman.com or 267.338.1376.

ABOUT HERB FINEBURG

hfineburg@offitkurman.com | 267.338.1376

Mr. Fineburg is recognized as one of Philadelphia’s most respected business lawyers whose substantial knowledge of tax law provides clients with strategic and cost-saving benefits in connection with commercial transactions, taxation and wills, trusts and estates matters. Known for his ability to resolve complicated matters effectively, Mr. Fineburg has assisted businesses and individuals with the organization of their finances, business and real estate affairs, and the structure of their assets (i.e., in LLCs, partnerships, corporations, trusts or joint ownership). He has substantial expertise in the preparation of buy-sell agreements for co-owners who are family members or unrelated business partners and has handled the resolution of shareholder and partner disputes and buy-outs. In addition, to working on bank financings, business contracts and employment matters for his business clients, Mr. Fineburg also provides advice on business acquisitions and sales. Mr. Fineburg, who began his law career as a commercial litigator and bankruptcy lawyer, frequently provides litigation counsel and assistance to a wide range of firm clients. His articles have appeared in the Pennsylvania CPA Journal, the Journal of S Corporation Taxation and other publications. A graduate of Washington University in St. Louis, Mr. Fineburg received his law degree from the University of Missouri and a Master of Laws in Taxation (LL.M) from the New York University School of Law, Graduate Division. Mr. Fineburg is the Managing Shareholder of the Philadelphia office and is also a member of the Board of Directors at Offit Kurman.

 

 

 

ABOUT OFFIT KURMAN

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