I have new clients, a same-sex couple. When interviewing them about their assets, they told me that they own their home as joint tenants with rights of survivorship (JTROS), and not as tenants-in-common (TIC).
In brief, the difference between the two are as follows. If two people own property as JTROS, then upon the death of the first, his interest disappears and the entire property automatically becomes the sole property of the survivor. The property does not pass by will, or by trust. It just “disappears.” If property is owned as TIC, then each person owns an undivided interest in the whole. They also have the right to sell or dispose of their interest, during life or at death, without the consent of the other owner.
There are a number of reasons why a same-sex couple would want to own their home as JTROS over TIC. There are also a number of reasons as to why they would want to own their home as TIC over JTROS. Before purchasing the home, they should have looked at a number of factors, including: the value of their home, the size of their taxable estates (if there is a taxable estate), how much each person was contributing to the purchase, whether or not they have minor children, who are their potential creditors, and what are their thoughts on the probate process.
Whether they should have chosen one of the other isn’t the point of this post. They told me that they owned the property as JTROS, as that was their intention when they bought the property. One thing I’ve learned through practicing law is that just because a client thinks something is true, doesn’t mean that it is actually true. So I went to the Broward County Recorder of Deeds website and looked it up.
The first thing I noticed was that the deed was prepared by a title company and not an attorney, and the second thing I noticed is that the title company screwed it up.
The deed is between “Developer,a Florida Limited Partnership, grantor” and “X, a single man and Y, a single man, grantee” Other than that, there is no indication whatsoever as to how X and Y are to own the property, i.e. as JTROS or as TIC. The deed was silent as to whether or not the transfer was supposed to be to them as tenants in common, or as joint tenants with rights of survivorship.
Florida Statute 689.15 provides, “The doctrine of the right of survivorship in cases of real estate and personal property held by joint tenants shall not prevail in this state; that is to say, except in cases of estates by entirety, a devise, transfer, or conveyance heretofore or hereafter made to two or more shall create a tenancy in common, unless the instrument creating the estate shall expressly provide for the right of survivorship.”
In other words, when a deed is silent as to whether or not there are survivorship rights, then, except in cases of tenancy by the entirety, it is treated as a tenancy in common without survivorship rights. Tenancy by the entirety only exists when there is a transfer to a husband and wife. So if the intention was for the transfer to them be as JTROS, then it had to actually say, to X and Y as joint tenants with rights of survivorship, or similar language.
Here is how and why the title company screwed this up. Most of their deeds are to married couples, a husband and wife. So, when some drone types the names of the purchasers in the computer program, “A and B a married couple,” then that is treated as a tenancy by the entirety with survivorship rights. However, in this case, because my clients are not legally married, the title company typed in “X and single man and Y a single man.” Without thinking, and by not specifying what their intention was, the title company allowed the state to choose for them, and in a way contrary to what the clients wanted.
Now, if one of my clients dies before his documents hare done, his interest in the house will pass by intestacy to his family, and not to his partner who lives there.
Nice job, Title Company.