Common Ways to Hold Title in Pennsylvania
If you're the sole owner of the new property, you don't have to worry about the vesting on your deed. When you purchase real estate with someone else - a spouse, a partner, or a family member(s) - one of the decisions that you’ll be making is how to take title to your new property. There are different types of tenancy, and the one you declare on the deed is actually quite important. The type of tenancy indicates how the ownership is legally structured and how the property's ownership will be handled after one of the tenants is gone. It's important to note that preferences for asset distribution outlined in a last will and testament do not override the vesting on the deed.
The following three options are available in Pennsylvania.
Tenants in Common
Two or more persons in whom title to a single piece of real estate is vested in such a manner that they have a common or equal right to possession and enjoyment of the property, but each holds a separate individual interest or estate in the property. Each owner may sell or encumber their respective interest or dispose of it by will, and if they die without leaving a will, their heirs inherit their undivided interest.
For example, if a couple buys real estate and the deed is vested as "Tenants in Common" should one of them pass away, their interest in the property goes to the their heirs, not the surviving partner.
with Right of Survivorship
Two or more persons who hold title to real estate jointly, with equal rights to share in its enjoyment during their respective lives with the provision that upon the death of a joint tenant their share in the property passes to the surviving tenants, and so on, until the full title is vested in the last survivor. A joint tenant cannot legally encumber their interest without the consent or joinder of all of the joint tenants.
For example, if three people purchase real estate and the deed is vested as "Joint Tenants" should one of the owners pass away, their ownership interest is distributed among the remaining title holders, not their heirs.
Tenants by the Entirety
A modification of joint tenancy between married couples only, which has the quality of survivorship but neither spouse can convey their interest to break the joint tenancy. Upon the death of either spouse, full title passes to the survivor. Absent mutual consent, neither spouse can alienate the right of survivorship by any act as long as the marriage lasts. Tenancy by entirety protects both spouses through the law. Tenancy by entirety laws are built on the premise that one spouse cannot be held accountable for the debts of the other.
For legally married couples, “Tenants by the Entireties” offers the most comprehensive protection under the law.