Listed below are the more common options on ownership of real property in Iowa that could be placed on a deed with joint ownership. Note two things I just indicated: these comments apply to real property (you know, land, dirt, back 40...not your car) and land located in Iowa. These same rules may not apply in Louisiana, or any other state. Also, I have a previously blogged about some possible concerns with joint ownership.
- "John Smith and Mary Smith" or "John Smith and Mary Smith as joint tenants" or "John Smith and Mary Smith as tenants-in-common" - The result of this type of ownership (sometimes kind joint tenants or tenants-in-common) provides that upon the death of one of the joint owners, the other joint owner continues to own a 1/2 undivided interest, and the estate of the deceased owner will handle the other 1/2 interest. Thus, if John dies first, his will (if he has one) or the intestate statutes (if he doesn't have a will) will dictate the ownership of his half interest. Mary may be surprised/upset/concerned with who she is owning the property at that time after John dies. Or, it is possible that Mary may be the only beneficiary and becomes the sole owner of all of the property. HOWEVER, just because Mary is the surviving spouse of John does not guarantee that she will receive John's 1/2 share at his death. Also, using "and" or "or" doesn't make a difference.
- John Smith and Mary Smith, as joint tenants with full rights of survivorship and not as tenants-in-common - This type of ownership provides that upon the death of one of the owners, the other owner automatically becomes owner of the entire property. This applies regardless of what the will provides and regardless of whether John or Mary really wanted it that way. However, this specific language must be used in the deed in order to have the property owned with such a result. This may not always be desired, as maybe you want to control what happens to that property at your death. For example, if you and a friend own property together, do you want that property to go to your friend or to your family?
- John Smith, life estate, with remainder to Mary Smith - This form of ownership basically gives John the ownership of the property for his life, with full ownership passing to Mary at John's death. John and Mary basically share rights during their lives. I won't dig into the buried neurons from law school in my little brain to explain the potential variations and issues associated with this form of ownership. (e.g., what if Mary isn't living at the time of John's death?) Suffice it to say this is just another method to title real property.
- NOT - Transfer on death or "Lady Bird Deeds" - "But my cousin's brother-in-law from (insert state other than Iowa) said that his barber's neighbor titled his property as "transfer on death" to his brother. Can I do that in Iowa?" No. The life estate is close to that type of ownership, but Iowa does not recognize these types of deeds. These are presented as ways to avoid probate in other states, but for several good reasons, Iowa does not recognize them.
The way that this property is owned can have an extremely important impact on the complete estate plan for individuals/couples. Setting up the ownership is critical to be aware of and not taken lightly as part of the overall estate plan process. This is one of those things that those DIY will plans may not provide full insight that an experienced estate planning attorney can provide guidance.