Options For Titling Real Estate in Tennessee
When you buy real estate in Tennessee, there are different ways that you can have your property titled. It is important to know the differences because it changes your rights in the property. Here is an explanation of the basic ways in which property is titled in Tennessee:
- Tenants in common. This is the default rule for everyone except married couples. When property is held as tenants in common, everyone who has ownership rights in the property has a right to use the property. Unless otherwise specified, the ownership in the property is equal and when the property is sold, the proceeds will be split equally among owners. Because this is the default rule, unless a vesting falls into another category, the owners will be considered tenants in common. It is also important to note that property held as tenants in common by individuals will probably have to go through probate in order to be transferred.
- Joint Tenants with Rights of Survivorship. If there is such a thing as the opposite of a default rule, this is it. Joint tenants with rights of survivorship own the property equally. The biggest distinction here is that there are survivorship rights, meaning that the surviving joint tenant(s) will acquire the deceased joint tenant’s portion. This means that no probate is required to transfer the property it is automatic until the last tenant living passes away. There are strict specifications on how the title must be formed so if you are interested in titling your property in this manner, we would be glad to make sure that your goals are accomplished.
- Tenants by the Entirety. This is the default rule for married couples and, in fact, is only available to married couples. Tenants by the entirety is very similar to joint tenants with rights of survivorship in that the survivorship rights exist, meaning probate will not be needed to transfer the real estate when the first spouse dies. However, tenants by the entirety has one major difference extra creditor protection. Creditors of only one spouse cannot attach to and sell the interest of the debtor spouse if the property is held as tenants by the entirety. The creditor must be a creditor of both spouses or have the permission of the non-debtor spouse to have that ability. The creditor can only attach to and sell the debtor spouse’s survivorship rights. Because the survivorship rights and creditor protection, tenants by the entirety is an attractive option.
WE CAN HELP
If you are unsure how your property is titled or want to see if there are better options for you, contact us and we would be glad to find the best option for your situation.
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