In other words, the titling of an asset establishes ownership. Below are a few methods to establishing ownership of real property, such as houses and land, and personal property like bank accounts, cars, and other items.
The property is owned entirely by one person. When the owner dies, ownership can pass to another via beneficiary designation or into the decedent’s estate. The person(s) entitled to inherit is controlled by the accounts titling, the decedent’s Last Will & Testament or, if none exists, by statute.
Some states, including Maryland, have a form of joint ownership that only occurs when the property is owned by a husband and wife, with each owning a one-half interest. T/E evolved from English common law and creates a legal fiction. In a T/E, when the first spouse dies, the surviving spouse owns the property in his/ her name alone. Such ownership treats a husband and wife as one owner rather than two individuals. As a result, both spouses’ signatures are required to sell the property. (One spouse cannot act independently of the other).
This can also protect the assets owned by married persons from the debt of an individual spouse. For example, if the wife defaults on a car loan in her name alone, the creditors cannot normally go after the house titled in both the husband and wife’s names. There are certain exceptions to the above scenario including when the U.S. Supreme Court upheld the IRS seizing property owned by spouses as T/E, even when only one spouse has an unpaid tax debt or lien.
In Maryland T/C is a form of joint ownership where each party individually owns their share of the property without any rights of survivorship. If one co-tenant dies, his or her ownership interest passes into their estate, and not to the surviving owner(s). Under T/C, owners can also possess unequal shares, such as a 65/35 split. In Maryland, unless the owners are married or the asset is titled to establish JTWROS (see below), ownership of property is presumed to be as tenants in common.
When two or more individuals equally own an asset together, it is classified as Joint Ownership with Rights of Survivorship. However, there is a presumption in Maryland against joint tenancy. The intention to create a joint tenancy must be explicit. Therefore, the asset titling must include language that establishes rights of survivorship for non-married individuals. The significance of this language is that when one owner dies—by operation of law—his or her share is owned by the surviving owners.
It is also important to remember that because each joint owner possesses an undivided right to possess the entire asset, each joint tenant has the right to conduct all business therein.