How you own real estate with any co-owners is an integral piece of your estate planning. Real estate ownership can take different forms, each with its own implications for ownership rights and property disposition. Two common types of ownership in real estate are joint tenancy with rights of survivorship (JTWROS) and tenancy in common (TIC). Understanding the differences between these forms can significantly impact your decision-making process when acquiring property. Let’s delve into each:
Joint Tenancy with Rights of Survivorship (JTWROS):Joint tenancy with rights of survivorship is a form of ownership where two or more individuals hold equal shares of the property. The key feature of JTWROS is the right of survivorship, which means that if one owner dies, their share automatically passes to the surviving owner(s) without going through probate. Here are some key points:

1. Equal Ownership: Each owner has an equal and undivided interest in the property.
   
2. Right of Survivorship: Upon the death of one owner, their share transfers directly to the surviving owner(s) automatically. This process avoids the need for probate proceedings.
   
3. Unity of Time, Title, Interest, and Possession: All owners must acquire their interests at the same time, by the same title, with equal ownership interests, and each must have an equal right to possession of the whole property.
   
4. Cannot Will Ownership: An owner cannot leave their share to heirs in a will; it automatically passes to the surviving co-owners.
   

Tenancy in Common (TIC):Tenancy in common is another form of joint ownership where each owner can hold different ownership percentages, and there is no right of survivorship. Here’s what you need to know about TIC:

1. Individual Ownership Shares: Unlike JTWROS, TIC allows owners to hold unequal shares of the property. For example, one owner might have a 60% interest, and another might hold 40%.
   
2. No Right of Survivorship: In TIC, if one owner dies, their share of the property is passed on to their heirs as specified in their will or according to state law. This share does not automatically transfer to the surviving owners.
   
3. Flexibility in Ownership: Owners can sell, transfer, or mortgage their individual shares without the consent of the other owners. This provides more flexibility compared to JTWROS.
   
4. Creation: TIC can arise by deed, will, or operation of law. It does not require the same unity of time, title, interest, and possession as JTWROS.
   

Key Considerations When Choosing Between JTWROS and TIC:

• Estate Planning: JTWROS is often preferred for estate planning purposes as it ensures seamless transfer of ownership to surviving owners without probate. TIC, on the other hand, allows for more control over who inherits the property.
  
• Relationship Between Owners: JTWROS is typically used between spouses or family members who wish to ensure that the surviving owner(s) retain full ownership automatically. TIC is common among business partners or friends who want more flexibility in ownership.
  
• Legal and Tax Implications: Both forms have different legal and tax implications, especially concerning income tax on rental income and capital gains taxes upon sale.
  

In Montana, multiple owners of a property will by default own the property as Tenants in Common unless their property deeds specifically states that the owners own the property as joint tenants with rights of survivorship. Be sure to check the deed on your property to see how you own the property with any co-owners. Whether you choose joint tenancy with rights of survivorship or tenancy in common depends largely on your specific circumstances, relationship with co-owners, and long-term plans for the property.

If you have questions on this or need to update your property ownership, give us a call! 

Estate planning is a crucial step in ensuring that your assets are distributed according to your wishes after you pass away. In Montana, two common tools for estate planning are wills and trusts. While both serve similar purposes, they have distinct features and benefits. Understanding the differences between wills and trusts can help you make informed decisions about how to structure your estate plan effectively.

Wills: A Traditional Approach to Estate Planning
A will is a legal document that outlines your instructions for the distribution of your assets upon your death. Here’s how wills work in Montana:

1. Flexibility: Wills offer flexibility in dictating who receives your property, allowing you to name beneficiaries and specify their shares.
2. Probate Process: In Montana, wills typically go through the probate process, during which the court oversees the distribution of assets and validates the will's authenticity. This process can be time-consuming and may involve court fees and legal expenses.
3. Public Record: Wills become public record upon your death, meaning that the contents of your will, including asset distribution and beneficiaries, can be accessed by anyone.
4. Executor Appointment: A will allows you to appoint an executor, who is responsible for managing your estate and ensuring that your wishes are carried out.

Trusts: A Versatile Estate Planning Tool
A trust is a legal arrangement where you transfer ownership of your assets to a trustee, who manages the assets on behalf of your beneficiaries. In Montana, trusts offer several advantages:

1. Avoiding Probate: Unlike wills, trusts bypass the probate process, leading to faster distribution of assets and potentially lower administrative costs.
2. Privacy: Trusts provide privacy since they do not become part of the public record. The terms of the trust, including asset distribution, remain confidential.
3. Asset Protection: Certain types of trusts, such as irrevocable trusts, can offer asset protection benefits, shielding assets from creditors and lawsuits.
4. Incapacity Planning: Trusts can also be used for incapacity planning, allowing a trustee to manage your assets if you become incapacitated and unable to make decisions.

Choosing the Right Option for You
When deciding between a will and a trust in Montana, consider the following factors:

1. Complexity of Assets: If you have complex assets or wish to provide ongoing management for beneficiaries, a trust may be preferable.
2. Privacy Concerns: If you value privacy and want to avoid public scrutiny of your estate, a trust may be a better option.
3. Cost and Administration: While trusts may involve higher upfront costs to establish, they can potentially save money and time in the long run by avoiding probate.
4. Desired Control: Wills offer more control over asset distribution, whereas trusts provide greater control over how assets are managed and distributed over time.

Seek Professional Guidance
Estate planning can be complex, and the decision between a will and a trust should be based on your individual circumstances and goals. Consulting with an experienced estate planning attorney in Montana is crucial to ensure that your estate plan reflects your wishes and provides maximum benefits for your loved ones.
In conclusion, both wills and trusts are valuable estate planning tools in Montana, each with its own advantages and considerations. By understanding the differences between the two and seeking professional guidance, you can create a comprehensive estate plan that protects your assets and provides for your family's future needs.