In a Tenancy in Common arrangement, what happens to a co-owner's interest upon their death?

In a Tenancy in Common arrangement, what happens to a co-owner's interest upon their death?

• A. It goes to the surviving owners
• B. It passes to designated beneficiaries
• C. It is liquidated immediately
• D. It creates a joint tenancy

Answer: (B)

In a Tenancy in Common arrangement, when one co-owner passes away, their interest in the property does not automatically transfer to the surviving owners. Instead, it passes to the deceased co-owner’s designated beneficiaries, as specified in their estate plan or will. This characteristic differentiates Tenancy in Common from Joint Tenancy, where the right of survivorship applies, allowing the surviving owners to automatically inherit the deceased owner's share. The ability to name beneficiaries provides the co-owner with control over who will receive their interest upon their death, which can be important for estate planning purposes. This option allows for flexibility in wealth transfer according to individual wishes, which is a distinct feature of Tenancy in Common agreements.

In a Tenancy in Common arrangement, when one co-owner passes away, their interest in the property does not automatically transfer to the surviving owners. Instead, it passes to the deceased co-owner’s designated beneficiaries, as specified in their estate plan or will. This characteristic differentiates Tenancy in Common from Joint Tenancy, where the right of survivorship applies, allowing the surviving owners to automatically inherit the deceased owner's share.

The ability to name beneficiaries provides the co-owner with control over who will receive their interest upon their death, which can be important for estate planning purposes. This option allows for flexibility in wealth transfer according to individual wishes, which is a distinct feature of Tenancy in Common agreements.