What Is Joint Ownership And What Does It Mean For You?
Article Written By: RebbecaMyers
What is joint ownership? Put simply joint ownership basically means that two people own something together. Now that something can be anything from a home, to an intellectual property such as an idea or artistic work. You can mostly find joint ownership applied to things in the real estate market, such as two people who jointly own a home. Usually this is a married couple.
Losing a spouse is a terrible ordeal to have to go through. While dealing with this issue and trying to overcome your grief you do not want to be tied up in probate so that you can own your home. Joint ownership takes care of this problem. In many states when a spouse dies, it is not considered an addition to property to the survivor, so you will not need to pay taxes for the sole ownership.
Also joint ownership can simplify a divorce when it comes to dividing up the assets. When property is jointly owned it can be next to impossible to contest rights to that property. Anything jointly owned will be split evenly. If someone wants to buy out the other person's half that can be arranged with all parties agreeing.
Most Financial advisors and realtors will advise you against joint ownership with a child. This can make it easier for a child to inherit a home once the parents have passed away. They could end up in probate other wise. Of course this could cause problems if there are other siblings involved. If one child is the joint owner of the property upon the parent's death the house immediately passes to the surviving owner. If the parent wants the house sold and the proceeds divided among all the children, it is up to the surviving owner to do this. If the owner chooses not to follow out the wishes of the deceased parent there is legally nothing that can be done about it. Another problem that can arise with joint ownership with a child is financial problems.
If the child has unstable finances such as bankruptcy or back taxes the parent could lose their home to creditors. There is also a concern for the child if the parent should have serious health problems or if the parent becomes financial unstable. Joint ownership of businesses and intellectual properties implies general rights to both owners. It is a good idea to have legal documents drawn up to avoid any problems. If you are working with a group of partners, obviously joint ownership isn't the way to go.
There are better methods of taking title. Taking title in the form of tenants in common or via joint tenancy is often recommended here. You may way want to do some research and see if it is the right choice for you and your business partners prior to proceeding with any venture.
About the Author
Setting up title as joint ownership may be the easiest and most weel known method to take ownership, but there other methods. Tenants in common and joint tenancy are often preferred for their advantages in a business setting.
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