There are several ways real estate can be titled depending on the circumstances and who is involved in owning the real estate. Most residential real estate is titled so that it passes cleanly to one person such as a surviving spouse or partner or, perhaps, a relative.  Sometimes, though, the real estate is bequeathed in a will or Trust to several people — usually close relatives — as a way of providing for loved ones when there really isn’t a lot of cash or other assets to divide up.

This is where Tenants in Common comes in. This form of home ownership allows different people to have various percentages of ownership interests in the property.  It doesn’t have to be 50/50 (in the case or two people), the ownership interest can be divided all kinds of ways.

Even The Happiest Family Can Come To Blows

I was recently speaking with an old acquaintance who had taken care of his mother and and aunt in their last days. It took a lot out of him and he spent a good deal of time, energy and money.  Surprisingly, when my acquaintance’s mother died she left him  1/2 ownership interest in the house and three other family members 1/6 each.  Now, there are four people who own this house and really only one who has lived there for any length of time.

It turns out that my acquaintance — the son — would like to buy the other family members’ interest in the house and own it entirely so he can live there. It turns out the other family members are not so keen to go along with this plan.  They want to sell it on the open market and try to grab as much money out of the sale of the house as possible.  Everyone disagrees on what the house is worth.  Although an appraisal has been performed there is still no agreement. To make matters worse, my acquaintance has sunk some of his personal funds into some home improvement projects like painting and some other updating after his mother passed away.  Obviously, if he has to sell the house and his 50% interest than he wants to recoup the money he spent fixing the place up.

Can There Be A Resolution?

Unfortunately, this will probably end up in court. Family member against family member bickering and fighting over money and real estate.  What was once a family that, at a minimum, got along and, under the best of circumstances, really enjoyed each other and felt a bond, is now fractured and will probably never be repaired.

The other aspect of this is that now that there are tenants in common, each of the four people who have an ownership interest in the real estate could, theoretically,  a) sell their portion of the ownership interest to someone else or b) bequeath their ownership interest in the real estate to anyone they choose.  As you can tell, it can get very complicated and very messy.  My guess is that the lawyers are the only ones who really win in a case like this which is a shame.  It was probably the intention of the original owner (the mother, in this case) to be generous to her family.

Everyone says there will never be a problem because, after all, they’re all family.  However, when it comes to money and real estate, blood is not as thick as you’d think.

What do you think?  Is it a good idea to leave real estate to more than one person in your Will or Trust? Leave a comment in the COMMENT section.  I’d love to hear!