Ways to Hold Title in Massachusetts

In order to properly prepare the mortgage documents we require information from you as to how you intend to take title to the real estate.

The three most common ways two or more persons may hold title to real estate are: TENANTS IN COMMON, JOINT TENANTS, or as TENANTS BY THE ENTIRETY (tenants by the entirety is only available for married couples.) Depending on the title you hold, you may be eligible for a partition of your estate.

Tenancy in Common vs. Joint Tenants and Tenants by the Entirety

Tenancy in common is a form of ownership where two or more people hold title to a property together, with each owning an individual and undivided interest in the property. With a tenancy in common, the owners can have an unequal share in the property. Meaning it can be owned 60/40 or 70/30 for example. It does not have to be an even 50/50 split. This form of ownership also allows for the property interests to be transferred by either or any owner. Meaning each owner is free to sell, transfer, or lease their interest in the property independently without the consent of the other owners. This form of ownership is common between business partners, friends, etc. who want to own property together but want to maintain control over their respective share. 

Joint Tenancy is a form of ownership where all owners have equal shares in the property. If there are two owners, then it is a 50/50 split, if three owners, each owns 1/3, etc. Joint Tenants cannot transfer their interest in the property independently like you can with a tenancy in common. In fact, if a joint tenant transfers their share, the joint tenancy and right of survivorship is severed and subsequently converted to a tenancy in common. This form of ownership is used for couples or close relatives that want to ensure the property is automatically transferred to the surviving owner upon their death without the need to go through probate. 

Joint tenancy has specific requirements for creation which are known as the four unities. These are the unities of time, title, interest, and possession. 

• Time: All joint tenants must acquire their interest at the same time
• Title: The joint tenancy must be created through the same instrument, which is typically the deed to the property.
• Interest: All joint tenants have equal interests in the property, which cannot be transferred.
• Possession: All joint tenants have equal rights of possession and use of the property

Tenancy by the Entirety is a form of joint tenancy that is only available to married couples in Massachusetts. It provides the same benefits and rights of survivorship outlined above that come with joint tenancy. It also provides protection from creditors of either spouse. It essentially allows the state of Massachusetts to view you as a singular legal entity, rather than two individuals. 

The biggest distinction between the ways to hold title comes from the right of survivorship and what happens to property upon an owners death based on how the property is titled. 

What Happens Upon Death?

1. When title is held as Tenants in Common, it is necessary to probate the estate of the deceased before the real estate may be sold or mortgaged. There is no right of survivorship, so the deceased person’s interest in the property passes to his or her heirs and not to the other owner(s).
2. When the title is held as Joint Tenants or as Tenants by the Entirety, the title automatically passes to the surviving owner(s) without the necessity to probate the estate of the deceased.
3. In any case of death of an owner of real estate, whether Tenants in Common, Joint Tenants or Tenants by the Entirety, it may be necessary to procure a release of the estate tax or taxes which may, by statute, become a lien on the property.

Who has Control and Management?

1. When title is held as Tenants in Common or Joint Tenants, the rents, control, management and possession of the property is in the owners equally, in the absence of an agreement to the contrary, but the individuals can divest themselves of their individual share in the property without the joining in with the others.
2. Under the provisions of M.G.L. c.209, section 1, when title is held as Tenants by the Entirety, (which is limited to husband and wife) rents, control, management and possession of property are in the owners equally. Chapter 209 further provides:

“…The interest of a debtor spouse in property held as tenants by the entirety shall not be subject to seizure or execution by a creditor of such debtor spouse so long as such property is the principal residence of the non-debtor spouse; provided, however, both spouses shall be liable jointly or severally for debts incurred on account of necessaries furnished to either spouse or to a member of their family…Neither the husband nor the wife can divest themselves of their interest in the property to anyone except to each other, so long as the marriage lasts, without the signature of both.”

It is important to know the differences between the ways an individual can hold title in Massachusetts to ensure that you are protected and that your property will be transferred upon your death in the way that you expect. Understanding these differences helps property owners choose the right form of co-ownership based on their personal, financial, and estate planning goals. If you have any questions at all, please contact us today to speak with an experienced attorney that can guide you through the different ways to hold title and help ensure your property interests are protected. 

This blog is intended only to give a brief description of the three common ways of holding title and is not provided for the purpose of advising you on how to take title. If further information is desired about creditor's rights against the title, advantages and disadvantages with respect to estate planning and other practicalities, you should seek legal counsel from your attorney or retain an attorney for advice in these matters.