The specific manner in which property is held in North Carolina can have profound implications for how it is treated in the courts. With long roots in English Common Law, the variations of titling and ownership of property are among the lynchpins of private property rights -- and among the first subjects studied in law schools.
The most important aspect to remember about joint tenancy is that there is a right of survivorship. That is, when one owner passes away, the ownership interest of the deceased is passed to the surviving owners. It does not go to the heirs. This can have important implications in estate planning. Also, under the law, all shares of ownership in the property are undivided. Historically, ownership was also equal among all partners. A recent change to North Carolina law, however, allowed for owners to hold different sizes of interest in a property without giving up joint tenancy. Each party has full rights to enjoyment of the property, and the property is not partitioned or segmented. Joint tenancy can only exist by the express consent of all owners. This is important because it helps protect heirs against being accidentally disinherited.
Read More: Joint Tenancy vs. Tenancy in Common
Advantages and Disadvantages
The chief advantages for North Carolina assets held in joint tenancy are in simplicity and in how the property transfers at death. Assets held in joint tenancy can be accessed by all partners even if one should be disabled or otherwise legally incompetent. Furthermore, because assets in joint tenancy go to other owners, rather than heirs, at the death of an owner, their interest bypasses probate. This can be an important estate-planning factor. Disadvantages include the loss of control: Because the asset bypasses probate, you cannot control it via a will or trust, nor in any other way. Your partners will have immediate and full control.
Tenancy in Common
Like joint tenants, tenants in common own an undivided interest in the property with full right of enjoyment of the entire property. The property is not partitioned or subdivided. With tenancy in common, however, there is no right of survivorship. When an owner dies, his or her interest passes through probate to heirs. It does not flow through to the other owners.
Advantages and Disadvantages
Tenancy in common allows for differing percentages in interest. That is, one partner can own a larger share than other partners -- a practice forbidden under joint tenancy in many places, though no longer in North Carolina. There are also fewer restrictions on how an owner may dispose of his or her shares in a property. An owner can sell off his interest without the consent of other owners. If you add someone's name to the list of owners in a tenancy in common property, you could create a taxable gift.
Jason Van Steenwyk has been writing professionally since 1998. A former staff reporter for "Mutual Funds Magazine," he has been published in "Wealth and Retirement Planner," "Annuity Selling Guide," "Registered Rep." "Bankrate.com" and "Senior Market Advisor." He holds a Bachelor of Arts in humanities from the University of Southern California.