By Peter M. Carrozzo, Chief Counsel Cornerstone Land Abstract

As a title counsel at Cornerstone Land Abstract, I come across a number of title issues that may be uncommon but appear with enough frequency to warrant discussion. Let me tell you about a recent file that was on my desk…

But first some methods on joint-ownership

When a deed recites two or more unrelated persons as joint owners of a property, the default method of ownership is a tenancy in common, where the parties have two distinct and independent interests that are freely and separately transferable. When a deed recites two spouses in title followed by language such as “husband and wife” (or “as tenants by the entirety” or “as spouses”) the parties are in title as tenants by the entirety which means they own undivided and equal interests in the property and have rights of survivorship upon the death of one spouse.  The parties cannot transfer their interests individually and they are afforded certain protections against individual creditors. Unlike unmarried persons, if a deed is silent as to how the parties are in title, pursuant to the New York Estate Powers and Trust Law, section 6-2.2, a “disposition of real property to a husband and wife creates in them a tenancy by the entirety, unless expressly declared to be a joint tenancy or a tenancy in common.” Thus, although the tenancy in common is the default between unmarried persons (including family members) the tenancy by the entirety is the default between married persons.

In clearing title to premises owned by husband and wife, where one or both of the parties are deceased, a number of factors come into play. With title in husband and wife where one spouse is deceased, a death certificate for the deceased spouse, along with a marital status affidavit from a third party, will allow us to certify title in the living spouse “individually and as surviving tenant by the entirety of” the deceased spouse. In the event that both spouses are deceased, it will only be necessary to probate one spouse’s estate, since the interest of the first spouse to die transfers to the survivor, as stated above, and then the survivor’s estate is probated upon death. Also note, no estate tax accrues upon the death of the first spouse with respect to the surviving spouse.

With that background, next month we will delve deeper into our uncommon but not unique scenario.