Concurrent estate is the umbrella of ownership structures underscoring the reality that most people don’t own real property on their own. Real estate is such a pricey thing to invest in that oftentimes, even with the maximum amount of loans and savings, one individual cannot afford an entire piece of property on their own. Or they’re married and it’s a family investment. Or, on the flip side, if a person does own a piece of real estate, it may be the most valuable asset they have, and they don’t want to leave it to just one sole heir when they pass. Concurrent estate is the solution, and in many cases, it also ends up being a problem.
What Is Concurrent Estate?
The term "concurrent estate" encompasses any type of real property ownership that is divided amongst multiple parties at the same time. It literally means that more than one person concurrently holds the ownership of an estate. There are a few types of concurrent ownership, and each has its benefits and potential down sides.
Types of concurrent estates/concurrent ownership
Before we get into the most common types, let’s first clear up a few confusing terms. Concurrent estate is the same as concurrent ownership, where multiple people or entities are listed as legal owner on a title -- but all the applicable title ownership structures are some kind of "tenancy." This starts everyone off wrong-footed because we commonly think of tenants in real estate as renters. But in this context, they’re owners.
Tenants by the entirety (TBE)
When a married couple buys a house, it is often within the TBE structure, meaning both parties are considered as one entity for legal purposes, with ownership of the whole property. When one spouse dies, the surviving spouse then owns the property entirely.
Only married couples are allowed the tenancy by the entirety (TBE) ownership structure, and only in some states. Check out this in-depth guide for more details.
The obvious disadvantage of this form of ownership rears its ugly head when couples are contemplating a divorce, and there needs to be a decision about who really owns the property when one legal entity becomes two.
Another of the common ownership structures for married couples, this grants equal ownership of real property to both spouses -- no matter how much of the money for the house comes from one spouse. Not only does each have equal rights in making decisions about the property (i.e., who can access it and who cannot), but each has equal rights of disposition (i.e., deciding when to sell the property). In the event of a divorce, the asset is divided evenly between the two.
This is another ownership structure only available to married couples, and only in limited states. Check here for a list of community-property states as well as some intriguing information on tax benefits.
This is a structure that can work for more than just married couples who want to take on property ownership together. However, it’s also the default ownership structure for married couples buying together in many states. Joint tenancy is a type of concurrent ownership wherein multiple persons acquire a piece of real property at the same time and each owns the same size share, under the same title. If one owner dies, the entire property goes to the surviving co-tenant. This is known as survivorship rights.
Before you choose this form of concurrent ownership, here is in-depth information on the rules and rights of joint tenancy.
Tenancy in common
The popularity of this ownership structure is due to its flexibility. At first glance, it offers solutions to the 50-50 approach of community property or interdependence of joint tenancy and tenancy by entirety. Tenants in common can own different-sized shares of a piece of property. They do not have to enter into concurrent ownership at the same time. Each co-tenant has right of disposition of their share of the property. They can also will it to the beneficiary of their choice.
However, when every owner can basically act autonomously in so many ways, there is potential for massive disagreement when decisions diverge. For this reason, unless potential co-tenants are some kind of family, a wiser choice may be to form a limited partnership or trust to oversee concurrent ownership of real property.
Concurrent estate -- complicated, but necessary
As long as people are forming life partnerships, getting married, buying property with their children, or otherwise combining assets to secure property, there will need to be different forms of concurrent estates. However, each one has its ways of being incompatible with human emotions and imperatives. That is why it’s so important to study the differences carefully before putting one’s name under the same title as someone else -- even a spouse.