Does It Matter How You Hold Title To Property?

By Attorney Truman Scarborough

This is the second in a series of articles on the ways title to property can be held. We will now look at joint ownership which is commonly used to allow another person to access an account and/or avoid probate.

Probate can be avoided with joint ownership only when there are survivorship rights. This provides that if one owner dies his/her interest in the property goes to the surviving owner(s).  There are survivorship rights when property is held as Joint Tenants and when a husband and wife hold property as Tenancy by the Entirety.  There are no survivorship rights when property is held as Tenants in Common, which is useful with a business so your interest to go to your family and not your business partner. Except for married couples, when there is no designation on how title is held, it will be as Tenants in Common. If one of the Joint Tenant owners conveys his/her interest to a third party the asset is no longer held as Joint Tenants and now is held as Tenants in Common.

For a married couple to hold property as Tenancy by the Entirety, the husband and wife must acquire identical interests in property at the same time by one instrument that provides for joint ownership and control. With real estate all that is required is a deed to both spouses. But with financial institutions the spouses need to indicate on the forms that they want their accounts to be established as Tenancy by the Entirety. A divorce converts a Tenancy by the Entirety to Tenants in Common.

There are several issues to consider with joint ownership arrangements: 


Tenancy by the Entirety provides protection from creditors. A judgment against one spouse does not encumber property owned as Tenancy by the Entirety.  This is not the case when property is held jointly with anyone else. Here a judgment creditor could acquire one of the owner’s interest in the property leaving the other owner sharing ownership with a judgment creditor.


FIRST, with bank accounts, if you can withdraw from an account without the other person’s signature, he/she can withdraw without yours.

SECOND, with real estate the problem is reversed. The other owner must sign a deed or a mortgage with you and therefore has control over what you do with the property.



For capital gains taxes, the profit from a sale of appreciated property is calculated by subtracting the basis (purchase price and other costs) from the sales price. When property is received at an owner’s death, the basis is stepped-up to the date of death value, reducing capital gains taxes.  If there was only one owner there would be a stepped-up basis on the entire value of the property. With jointly own property the stepped-up basis is only on the one-half received from the deceased owner.

For example, if jointly owned property had a basis of $100,000 each owner’s basis would be $50,000. If the property has a value of $200,000 when one owner dies, the surviving owner’s basis becomes $150,000. There is a stepped-up basis from $50,000 to $100,000 on the half received from the deceased owner plus the $50,000 basis on the half initially owned by the surviving owner.  

For further information you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267-4770. Truman Scarborough’s office is located at 239 Harrison Street, in Titusville.