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Chapter: 1600 Assets Program: MSSI, SFP 5

1640.0303.02 Joint Ownership by Husband and Wife (MSSI, SFP) If a husband and wife own liquid assets as "tenants by the entirety," each owns the property as a whole, not as equal shareholders. Where state law recognizes tenancy by the entirety, one spouse cannot sell the property or his interest in the property without the consent of the other. Upon the death of one, the survivor owns the whole asset.

The tenancy by the entirety arrangement remains valid for any period when the husband and wife are separated. When the marriage is dissolved, the tenancy by the entirety usually becomes an ownership in which each divorced spouse owns 50 percent of the property. However, where state law or a divorce decree indicates another type of ownership, joint ownership is not applicable. 1640.0303.03 Trusts Ownership (MSSI, SFP) A legally binding verbal or written trust is a right of property held by one party for the benefit of another (the beneficiary). The beneficiary of a trust does not hold legal title, but has an equitable ownership interest in the property. According to the terms of the particular trust involved, the beneficiary must be the individual designated to receive income from the trust either directly or through the trustee.

Generally, an individual who is appointed a trustee cannot use any of the funds in the trust for personal benefit. In this situation, the trust is not an asset to the individual acting as the trustee. 1640.0304 Ownership of Real Property (MSSI, SFP) Ownership of real property can consist of an interest in the title or a right to the use of the property without title to the property. The owner of real property is generally the individual who has legal title and the right to control the property. 1640.0305.01 Ownership of Real Property by Title (MSSI, SFP) An individual may have sole ownership or a shared ownership interest in the title to real property. When property is held in “fee simple”, this means that the owner has the sole ownership interest. The owner alone (or if the owner is mentally incompetent, the owner's legal guardian) may sell or transfer the ownership interest without conditions imposed by others.

Shared ownership means that ownership interest in the property is vested in more than one individual. Shared ownership may be by "joint tenancy," "tenancy in common," or for a married couple only, “tenancy by the entirety”.

In joint tenancy, each of the joint tenants has an equal interest in the whole property for the duration of the tenancy. Upon the death of one of two joint tenants, the survivor becomes the sole owner. Upon the death of one of three or more joint tenants, the survivors are joint tenants of the entire interest.

However, it is possible in most states for the joint tenants to take some action during their lifetime to convert the joint tenancy to a tenancy-in-common. In tenancy-in-common, two or more individuals have an undivided partial interest in the whole property for the duration of the tenancy. There is no right of survivorship to a tenancy-in-common.

"Tenancy by entirety" property ownership, which only applies to a husband and wife, is discussed in passage 1640.0303.02, Joint Ownership by Husband and Wife. 1640.0305.02 Shared Ownership of Real Property (MSSI, SFP) When the individual shares ownership with another individual or other individuals, only the individual's ownership interest is included. If there is no documentation defining the portion owned by each individual owner, all owners are assumed to have equal shares in the property.