Virginia Real Estate: Joint Land Ownership

If you are investing in property with a business partner or a family member, you need to know about the various ways that both your ownership interests can be structured. I last spoke about the different types and sizes of ownership interests. This article is dedicated to balancing the interests of multiple owners.

So how can property be owned by more than one person, and what are the benefits and negatives of each type of ownership.

Tenancy in Common

This type of ownership is most common between non-family members. A tenancy in common is where there are multiple people who have an ownership interest in a property. For example, three business partners could purchase a property together and all own the property as tenants in common. The partners are not required to have equal ownership interest in the property. Therefore, you can use this type of arrangement to have majority shareholders in the property.

The negative of this type of ownership style is that it does not common with a “right of survivorship.” This means that if one of the business partners pass away, the property will not automatically be divided between the remaining business partners. Instead, the property will be divided pursuant to that business partner’s estate planning documents.

Joint Tenancy

This type of ownership can be between either family members or business partners. The difference between a joint tenancy and a tenancy in common is that all members of a joint tenancy must have equal shares in the property. Furthermore, a joint tenancy must be created at the same time by the same deed. This makes planning a little more difficult. However, a joint tenancy can also have a “right of survivorship” if the appropriate language has been included in the deed. This makes the transfer of property much smoother in the event that one of the other owners are deceased.

Tenancy by the Entirety

The final major type of ownership interest with multiple individuals is restricted to husband and wife. A tenancy by the entirety is an ownership structure whereby both the husband and the wife own the property together.

There are several benefits to electing to utilize a tenancy by the entirety. The major benefit is that debt collectors cannot put a lien on the house unless the debt is owed by both the husband and the wife. Therefore, if one party has significant student loan debt, this may be the ideal ownership style.

The largest negative of this ownership structure is related to divorce or bankruptcy. If there is a mortgage on the house and someone needs to file bankruptcy, it may force both parties to file a joint bankruptcy. Alternatively, if the parties are getting divorced it will impact property distribution.

Why You Need a Lawyer

A lawyer is important in preparing to purchase property to help advise you on which type of ownership structure is best for your particular case. The list above is limited, and does not cover all potential types of ownership. Nor does the list fully explain all possible negative or positive consequences of each ownership structure. Consult with a lawyer before signing a deed so you have the ownership structure that protects you the most.

Virginia Real Estate: Types of Land Ownership

If you are a landowner or are thinking about purchasing land, there are several things you need to know before you begin your investment. Land comes in several different shapes, sizes, and types of ownership. These types of ownership can have significant impacts on several other aspects of your life including estate planning, liability for injuries on the property and much more. Ownership can be defined by several factors including how long you can stay on the land, what you are allowed to do on the land, and what other people who invested with you can do with the land.

So what are the major types of land ownership?

Fee Simple

This category of land ownership refers to a complete grant of title to the property. If you own land in fee simple, you own the land outright. The types of limitations that can be placed on a fee simple ownership are limited. A common example of a fee simple ownership is if your grandmother were to deed you complete ownership of the family farm. Common limitations on ownership may include that you are required to continue operating the land as a family farm. In the event that you fail to continue to operate the land as a family farm, you may potentially forfeit your rights to the property under some situations.

The law further splits up fee simple ownership into several subcategories, but those subcategories are best discussed with your real estate lawyer.

Life Estate

The next category of land ownership is a life estate. A life estate is a grant of ownership in land for a limited period of time. This period of time is commonly measured by the land owner’s life span. A common example of a life estate is if your grandmother were to deed you the family farm for your entire life time, the family farm to pass on to a grandchild at the time you are deceased.

Leasehold Interest

The next major category of land ownership is a leasehold estate. The most common example of a leasehold estate is a leasing agreement with a landlord. Upon signing a leasing agreement, you have an interest in staying in the land pursuant to the terms of the lease. Another example that is common in the rural United States is a leasehold farming interest. Many farmers in the rural United States lease farming land from the federal government. Some private industries also do this type of leasehold estate. For example, a cocoa farm may lease a house and the land to a tenant for farming purposes.

Condominiums

The last major category of land ownership is a condominium. A condominium is a larger property that has been split into several pieces. These pieces are then sold to individuals. These individuals are then allowed access to common areas, but must pay for upkeep of those common areas. This type of ownership structure is common in major metropolitan areas.

Why You Need a Lawyer

If you are considering purchasing land or selling land, it is important to know what your options are for categories of land ownership. You can bargain certain types of land ownership to increase or decrease the costs of ownership. Knowing your specific needs and outlining those needs can help you acquire the type of land ownership best for you. The categories above are not an exhaustive list of types of ownership.

Virginia Probate: What to Do if You Are Left Out of a Will

Sometimes people are left out of their family's will. This can create distrust and animosity among family members. Sometimes people are accidentally left out of the will. Other times, the family member intentionally decided to disinherit them. 

Either way, a disinherited family member may still be entitled to some compensation from the depending on when the will was drafted and whether the action was intentional or unintentional.

So who is entitled to receive compensation even if they are left out of the will, and how much are they entitled to?

Children Born After the Will's Creation

The first category of individuals that may be left out of a will are omitted children. This category is dedicated to children who are born after the will is executed. If the will does not explicitly waive the interests of children born after the will is created, then those children are entitled to a share of the estate’s assets.

An omitted child may be entitled to two different types of compensation depending on how the will is written. If there are other children who receive assets under the will, then the omitted child will likely be entitled to at least the same amount of compensation as those other children. If no child receives compensation under the will, then they are entitled to an equal share of the assets depending on how much is left after other claims.

Marriages After the Will is Written

It is not uncommon for a person who drafted a will to either marry or remarry after their will is created. If they do not update their will to reflect their new marriage, then there may be some problems. A new spouse, or an "omitted spouse," is entitled to receive compensation from an estate even if their name does not appear in the will. An omitted spouse is entitled to receive the same amount of money as if there had been no will.

Spouses Intentionally Left Out of a Will

Even if a person does not remarry after creating a will, and intentionally leaves nothing to their spouse, the spouse is entitled to compensation from the estate. This is known as an “elective share.” An elective share may be either a third or a half of an estate, depending on whether there are any surviving children or omitted children.

Why You Need a Lawyer

If your relative left you out of their will, either intentionally or unintentionally, it is important to have a lawyer walk you through your rights and how to request compensation from an estate. There are many different calculations that come into play depending on the type of heir you are, and when the will was written. If you have been left out of a will, seek out legal counsel as soon as possible.

Virginia Probate: Duties of an Executor

So you have been appointed to be an administrator or an executor of an estate. You probably have several questions of what your duties and responsibilities are. These are important questions to have answered, as failure to perform your job well may result in personal liability.

So what are your duties as an executor or administrator? Here is a partial list of those duties.

OPEN THE ESTATE

The first thing that needs to happen is to timely open the estate. Your first stop should be a local probate lawyer so you can have guidance for your particular case. However, the first court official to interact with is the probate clerk. You need to schedule a meeting with your local probate clerk and to get information related to what documentation is required to open the estate.

Common examples of required documentation include copies of the will and any accompanying documents and a certified death certificate. You need to bring these to the probate clerk where your family member last lived.

PROVIDE ACCOUNTINGS

After the case has been opened, you will have to provide the court with several accountings. These accountings are supposed to show the flow of money both into and out of the estate. For example, if there is cash sitting in a bank account, that must be accounted for. If that money is used to pay a creditor, that must also be accounted for and provided to the court.

You will have to file several accountings, at least once a year.

CREATE AN INVENTORY

If there is any personal property, that will need to be detailed on an inventory. This document will catalogue personal property such as jewelry, clothes, vehicles, tools, etc. The purpose of an inventory is to notify the court and various officials as to what property is available if something needs to be sold to satisfy a debt. It also allows the court to disburse that property if there is a specific bequest in the will.

RESPOND TO CREDITORS

Throughout a probate proceeding, creditors are likely to file proofs of claim detailing their claims to the estate. You may need to respond to these claims and hold hearings on the sufficiency of these claims.

WHY YOU NEED A LAWYER

A lawyer is important because you need to meet all of these obligations. Failure to do so may result in personal liability. Therefore, before you begin any of this work, consult a probate lawyer near you. Always keep in mind, you may not have to serve as an executor if you don't feel comfortable doing so.

ADDITIONAL RESOURCES

Virginia Bar Association's Guide to Probate Administration

Virginia Probate: Who is involved in the process?

Virginia probate is a complicated, lengthy process depending on the type of estate that you are dealing with. However, there are several people who will likely be involved throughout the probate process. If you have been appointed as administrator or executor, you need to be familiar with these people and their role.

So who are these people, and what do they do?

Commissioner of Accounts

The Commissioner of Accounts (“COA”) is an individual that is appointed to an estate to make sure that all the financial aspects of the estate are treated properly. The COA is typically an attorney, and the COA has significant power in probate proceedings. For example, the COA can demand inventories and accountings of an estate. The COA also has the ability to prolong proceedings and bring independent actions against an administrator or an executor if they have failed to properly perform their duties.

Therefore, It is important to listen to the COA when you are probating an estate. They can be an invaluable asset in getting the estate resolved. However, they can also be a powerful enemy if you have failed to properly perform your duties.

Probate Clerk

Each court in Virginia has a number of clerks. These clerks are there to make sure that the appropriate documentation is filed with the court in order for the case to start. There are several different types of clerks including land records clerks and probate clerks. A probate clerk’s job is to sit down with the person who intends to administer the estate and to explain what documents are necessary in order to begin.

It is important to work with the probate clerk in your local area to determine what local rules there may be. Failure to adhere to these rules may prolong the administration of the estate.

Creditors

An estate may also have several people that money is owed to. These are creditors. A creditor representative can file claims against an estate. It is important to work with the creditor representative to determine how much is owed on the debt and how that debt will be treated during probate.

Bonding Company

Sometimes, you may be required to post a bond if the will wasn’t properly drafted. A bond company may be involved in helping you post a bond with the court to cover the liability of probating the estate. It is important to work with your bond company representative to determine how much of a bond is required, and how that bond is treated.

Why you need a probate lawyer.

With all these moving parts, it is easy to get lost in probate proceedings. A lawyer can help you navigate interacting with these various representatives and to make sure you do your job properly. Failure to properly administer an estate could subject you to personal liability. If you are considering qualifying to probate an estate, seek legal help.