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Maryland Estate Planning: How Property is Held in Maryland

houseWhen creating an estate plan it is important to understand how property (real estate) is owned. In Maryland, when more than one person will have an interest in the property, Title can be held by the parties in one of the following three ways.

1. Tenants in Common

In this type of co-tenancy, each party owns their share of the property as an individual with no right of survivorship. Therefore, if one co-tenant dies, her interest passes to her heirs. In this type of tenancy, two or more co-tenants can hold title in unequal shares (e.g. 60/40, 90/10 etc.). In Maryland, title is presumed to be held as tenants in common unless the owners are married or unless it is specified that the parties will hold as Joint Tenants with Rights of Survivorship.

2. Tenants by the Entireties (“Tenancy by the Entirety”)

This is a form of concurrent ownership which can be held only by a married couple. There is a presumption in Maryland that property held by husband and wife is held as tenants by the entireties, even if it is not specified. In Tenants by Entireties, there is a right of survivorship but the owners cannot individually convey or partition their individual interests. Property held as Tenants by the Entireties is immune from creditors of one spouse (except for Fed Tax liens). A Tenancy by the Entirety is destroyed and converted to tenants in common upon the divorce of the parties.

3. Joint Tenancy

Joint Tenancy is a co-tenancy that includes rights of survivorship for non-married individuals. However, in Maryland, there is a presumption against Joint Tenancy. Therefore, the intention to create a joint tenancy must be explicit, e.g. the deed should state “as joint tenants with rights of survivorship”. In addition, to create a valid Joint Tenancy, the following four unities of interest must be present:

Unity of Time – interests of all co-tenants have to vest at the same time.
Unity of Title – interests of all co-tenants have to be acquired from the same deed.
Unity of Interest – all co-tenants must have equal interests.
Unity of Possession – all co-tenants have equal and concurrent rights to possess the property.

For a free, confidential conversation to discuss the importance of how property is held as it pertains to creating Wills and Trusts, along with other estate planning matters, contact Maryland Estate Planning attorney Stephen J. Reichert at 410-299-4959, or here.