Basics of Property Ownership

The way in which you hold title to your assets can have a major impact on your estate plan. Different property ownership types grant various levels of authority to titleholders and dictate what happens after an owner passes away. Two common types of ownership are “tenants in common” (TIC) and “joint tenants with rights of survivorship” (JTWROS).

Tenants in Common, Joint Tenants with Rights of Survivorship and Tenants by the Entirety

Individuals who own property as TIC own a percentage of the property. These percentages can be equal or unequal. When one tenant dies, her percentage interest would generally pass to beneficiaries in accordance with her Will (or via intestacy if she has no Will), rather than passing automatically to the surviving tenant. The interest of the surviving tenant will remain unaffected by the death of his fellow tenant, except that he may now own property with a brand new tenant. TIC accounts can be useful if the tenant prefers for her interest to pass to the beneficiaries in her Will rather than automatically to the surviving tenant. It is important in this case, however, to examine whether it makes practical sense for your named beneficiary to become a co-owner with the surviving tenant at your death.

With JTWROS, on the other hand, each tenant owns an equal share of the underlying property. In addition, unlike TIC, when one tenant dies, her interest passes automatically by operation of law to the surviving tenant. In other words, the surviving tenant has a “right of survivorship.” The interest of the deceased tenant essentially bypasses the terms of her Will (thus passing outside of probate), and lands automatically in the hands of the survivor.

JTWROS accounts can be beneficial in that the surviving tenant has immediate access to the account at the first tenant’s death. This can be a good way of ensuring funds are available to a surviving spouse to cover immediate expenses. It is important, however, to understand how the ownership of your accounts impact your existing testamentary plan. For example, if your Will names your father as beneficiary, but the bulk of your assets are comprised of JTWROS accounts held jointly with your mother, your mother would stand to benefit the most from your estate plan as a whole. In short, the primary beneficiary of your estate may not simply be the person named in your Will.

In many states, there also exists a form of ownership called “tenants by the entirety” (TBE). Only married couples can hold title to property as TBE. Just like a JTWROS, TBE carries with it a right of survivorship. Unlike with JTWROS, however, no tenant has a unilateral right to break a TBE. Such a termination requires the consent of both spouses. Not all jurisdictions recognize this type of ownership structure and some states, like New York, limit its use to real property. One of the major benefits of this type of ownership is the ability it affords a surviving spouse to shield property from the creditors of a deceased spouse.

Transfer-on-Death or Payable-on-Death Accounts

A Transfer-on-Death (TOD) or Payable-on-Death (POD) account allows you to name a beneficiary who will inherit your account after your death. In this sense, it operates similarly to an IRA or employer retirement plan. Unlike a TIC or JTWROS account, however, the named beneficiary has no right to access the funds during your life. You retain the right to change or remove the beneficiary at any time.

TOD or POD accounts can be an effective way to avoid probate. They are also administratively convenient in that they allow the beneficiary immediate access to the funds held in the account. At your death, the beneficiary is provided access to the funds after providing proof of your death. As with a JTWROS, however, it is important to make sure this type of account ownership facilitates the goals of your overall estate plan.

It is possible to combine these various accounts types in numerous ways to help facilitate your individual estate plan. Some spouses find it beneficial to own accounts as JTWROS but also place a TOD contingent beneficiary on the account to transfer funds to a surviving child or to a trust in the event of simultaneous death.

Community Property vs. Common Law States

Each state in the U.S. generally follows one of two property classifications for property acquired during marriage: community property or common law. Most states, including New York and Connecticut, follow a common law regime. In these states, property acquired by one spouse during the marriage is generally the separate property of that person (unless they have agreed to hold the property jointly).

If you live in a community property state, all property acquired during marriage is automatically assumed by law, in the absence of specific evidence to the contrary, to be owned jointly by both spouses. This means that in the event of a divorce or death, all community property is divided equally between the two spouses.

Custodial Account Ownership

Property held for the benefit of a minor, if not owned by a trust, is typically held via a custodial relationship. The Uniform Transfers to Minors Act or Uniform Gifts to Minors Act (UTMA/UGMA) allows a custodian – typically a parent – to hold assets for the benefit of a minor child, defined either as an individual under the age of 18 or 21 depending on the relevant state law.

The custodian has the right to control the property, but legal title is deemed to be vested in the minor. This means that the property in the custodial account must be used for the benefit of the minor. Once the minor reaches the age of majority, control over the property held in the custodial account automatically passes to the (former) child by operation of law. When establishing a custodial account, the custodian has the ability to choose a successor custodian to manage the minor’s property in the event of his death prior to the minor reaching the age of majority.


The way in which your property is titled can have a meaningful impact on your estate plan. Whenever you review your estate plan, you should always confirm that your assets are titled in accordance with the goals and objectives of the plan.

In addition, whether you live in a common law or community property state, it is important to understand how the regime affects your estate planning. Furthermore, if you move from a common law state to a community property state, or vice versa, you should make sure to consult with an estate planning attorney to understand how your existing estate plan may be affected by the move.



Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, Certified Financial Planner, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Wealthspire Advisors cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. © 2023 Wealthspire Advisors
Eric Dostal

About Eric Dostal, J.D., CFP®

Eric is a wealth advisor in our New York City office.

View all posts by

Related Posts

RSUs vs. ISOs

RSUs vs. ISOs: Equity Compensation 101

Chances are that if you’ve reached a point in your career where your employer has granted you Incentive Stock Options ...