Q: There are two of us on the title of a home. We own the home as joint tenants with rights of survivorship. Is it legal for just one of us to add a third person to the title of the home?
A: The short answer is yes, you can add a third person to the title of the home, but you might end up with an unexpected result.
Right now, you and your co-owner own the home together, and each of you owns one-half of the property. If one of you should die, the surviving owner would become the sole owner of the home.
You or your co-owner can add a third person to the title of the home. But you cannot add them as a co-owner of the property by yourself where each of you would then own one-third of the property. Instead, you’d have to convey part of your ownership share in the home to that person. Once you do that, your first co-owner would own a one-half interest in the home and you and the new co-owner would each own a one-quarter interest in the home.
But once you’ve added that third owner, you’d break the joint ownership with your first co-owner. At that point, you and the other owners would become tenants in common: Upon the death of your first co-owner, their interest in home would no longer automatically go to you. That person’s share would be dispersed according to that person’s will or according to state law, at which point you might have one or several new co-owners.
As between you and the new co-owner, you could each own the one-half interest in the home as joint tenants with rights of survivorship (where you would each inherit the other’s share in the event of death) or as tenants in common equally (one-quarter interest each) or in any percentage share you decide on (for example, 90-10).
Are you asking because you want to add a child, friend or relative to the title to the home? If that’s the case, and you and your first co-owner agree to do that, then you and your first co-owner could convey title to the new co-owner in such a way that all three of you could own the home as joint tenants with rights of survivorship, or in percentage ownership as you may desire, or any combination of the two methods.
But if your first co-owner wants to have nothing to do with conveying a share of that person’s ownership and you break the co-tenancy, you and the first co-owner would become equal share owners but without the rights of survivorship.
We’d suggest you talk to a real estate attorney to go over what you are thinking of and figure out a plan that can work for all of you.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, https://bestmoneymoves.com.)