Property Ownership and Its Effect on Estate Planning

One aspect of estate planning is to formulate a plan to achieve your goals for the disposition of your property upon your death. How you hold title to property will determine how your property is distributed.

For example, the disposition of real property you own, will depend upon how your property is titled. There are a number of ways an individual can hold title to real estate in Maryland. Most commonly, title to real property can be held as "tenants by the entireties", "joint tenants", "tenants in common", or as a "life estate."

In Maryland, only a husband and wife can hold title to real property as tenants by the entireties. A husband and wife do not have to hold real property as tenants by the entireties, however, the deed must clearly state that another form of title is being conveyed to them. When a husband and wife hold real property as tenants by the entirety, each spouse has a right of survivorship in the property. That is, upon the death of one spouse title to the property will automatically vest in the surviving spouse.

In Maryland, individuals can also hold title to real property as joint tenants, with the right of survivorship. When property is held by two or more individuals as joint tenants, upon the death of a joint tenant, their right, title and interest in the property will pass to the surviving joint tenants and not to the deceased joint tenant's beneficiaries or heirs.

If an individual holds title to real property with others as tenants in common, they do not have a right of survivorship in the property. That is, upon the death of a tenant in common, their interest in the property will pass as provided under their will or by intestacy and not to the other co-owners of the property like a joint tenancy.

In Maryland, an individual may also be granted a life estate in real property. Generally, this is a conveyance of the use, possession and enjoyment of real property to an individual for their lifetime, the life of someone else, or until the happening of an event. Upon the death of the specified individual or the occurrence of the event, the interest of the life tenant in the property terminates.

In summary, the title you have in real property will determine how your interest in that property is distributed upon your death. In addition to its effect upon the disposition of your property, how you hold title to property is important to consider for other reasons, including, tax, estate and disability planning, and probate administration. Therefore, you should consult with an attorney before re-titling your property.

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