Where there is more than one purchaser, those purchasers must decide how they will hold title.  Some may wish to hold title in the name of an LLC in which they are members, but where they wish to hold title in their individual names, title is “joint” and the purchasers must select from among the joint ownership options.  In South Carolina, joint ownership can take any of three (3) forms as follows:

Tenants in Common:  Upon the death of one owner, that owner’s interest passes through his estate (pursuant to the terms of a Will or, in the absence of a Will, pursuant to the laws of intestacy).  The other features of this form of ownership are:

1. Any owner can convey his interest without permission/involvement of any other owner;
2. The owners can hold unequal ownership (90%-10%, etc.);
3. There can be more than two (2) owners;
4. The creditors of any owner can reach that owner’s interest; and
5. It is subject to partition.**

Joint Tenants with Rights of Survivorship:  Created by SC Code §27-7-40. Upon the death of one owner, the death certificate is filed at the courthouse and that owner’s interest automatically passes to the surviving owner(s).  In other words, it does not pass through an estate.

The other features of this form of ownership are:

1. The owners must hold equal ownership (50%-50% or 1/3-1/3-1/3, etc.);
2. There can be more than two (2) owners;
3. The creditors of any owner can reach that owner’s interest;
4. If there are only two owners and they are married to each other, an Order of Divorce converts the joint tenancy to a tenancy in common; and
5. It is subject to partition.**

Tenants in Common with Rights of Survivorship (a/k/a indestructible right of survivorship):  Upon the death of one owner, the death certificate is filed at the courthouse and that owner’s interest automatically passes to the other owner(s).  In other words, it does not pass through an estate.  The other features of this form of ownership are:

1. There can be more than two (2) owners;
2. The owners can hold unequal ownership (90%-10%, etc.);
3. No owner can convey his interest without the consent/involvement of the other tenant(s);
4. Arguably, the creditors of one owner cannot reach property held in this manner; and
5. It is not subject to partition.**

Note – South Carolina does not have “tenancy by the entirety,” which is a common asset protection tool in other states.  Our “tenants in common with rights of survivorship” is comparable, but it is unclear whether it affords full protection from the creditors of one owner.

**Partition refers to a lawsuit brought by one owner against other owner of the same property in order to have the property divided.  The court will physically divide the property (ex. if 2 parties jointly own a 100 acre tract the court will give each party 50 acres) or, if the property cannot be physically divided (such as a condominium), the court will sell the property and divide the sale proceeds between the owners.

RELATED METHOD:

Life Estate with Remainder Interest:  While not technically “joint ownership,” title can be divided so that one person has rights in the property (typically the right to possession) and, upon the death of that person, title vests fully in the remainderman.  For example, a person might convey property to his children, but reserve a life estate to himself.  Upon the death of the life estate owner, title automatically passes to the children as the “remaindermen.”  It is important to note that, if the life estate owner wishes to sell the property during his lifetime, he must have the consent of the remainderman and the remainderman is entitled to a share of the sale proceeds (the share to which the remainderman is entitled requires a somewhat involved calculation and is largely based upon the life expectancy of the owner of the life estate).

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This short article is intended to quickly illuminate the features and distinctions between/among the joint title options in South Carolina.  Hopefully, the straightforward presentation will serve as a useful tool for our clients as well as professionals in the field.