MEANING OF CO-OWNERSHIP AND JOINT OWNERSHIP
CO-OWNERSHIP
Co-owners can be a group or individuals that own a percentage of an asset in conjunction with another individual or group. A co-owner is an individual or group that shares ownership in an asset with another individual or group. Each co-owner owns a percentage of the asset, although the amount may vary according to the ownership agreement.
The rights of each owner are typically defined in accordance with a contract or written agreement, which often includes the treatment of revenue and tax obligations.
The relationship between co-owners can vary, and the financial and legal obligations depend on the benefits each party ultimately wishes to receive. For real estate, the legal concept of co-owner, in which the parties involved may operate under joint tenancy or tenancy in common, has important ramifications.
Similarly, co-owners of a brokerage account or bank account are bound by strict procedures and legal constraints concerning account activity and the benefits obtained from the account during the time when the account is active.
When the account is closed, co-owners or legal representatives of the co-owners must be involved.
JOINT OWNERSHIP
Joint-owned property is any property held in the name of two or more parties. These two parties could be business partners or another combination of people who have a reason to own property together. The matrimonial status of joint ownership of assets is when the two parties are husband and wife.
Joint-owned property may be held in one of several legal forms, including joint tenancy, tenancy by the entirety, community property, or in a trust.
Joint-owned property is any property held in the name of two or more parties, like husband and wife, or business partners, friends, or family members. The risks of joint-owned property are the potential for financial issues with partial ownership of a property, like one party wanting to sell their share. A joint-owned property can be manifest in legal forms, such as joint tenancy, meaning two or more property holders each have equal rights and obligations to the property until their death.
A joint-owned property may be held in legal forms, such as joint tenancy. This is when two or more people have equal rights and obligations to the property they rent or own together until one partner passes away.
At this time, the owner’s interest passes to the survivors without probate. Tenancy by the entirety, another joint-owned property option, is when the parties are husband and wife. In this case, each spouse has an equal and undivided interest in the property. If one spouse dies, the full title of the property automatically passes to the surviving spouse.
Two additional forms of jointly owned property, community property, and trust, also have distinct features. A spouse can acquire community property (marital property) during a marriage. This property, such as a rental unit, legally belongs to both partners.
For tax purposes, each spouse may claim half of the total income earned from community property. Finally, in a living trust, spouses may create a joint option in which both individuals are grantors and trustees. They may place individually or joint-owned assets in these trusts. Either person may revoke the trust during their lifetime.
Choosing the best form of ownership for joint property can simplify things if one of the owners passes away. Joint tenancy is commonly used to avoid probate, a lengthy, costly, and public process of distributing the deceased’s assets in court.
