Life experiences offer us terrific stories of the importance of the language we use and where we use it. One of my favorite language stories happened when I moved from Louisiana to North Carolina. In my growing up years, the term “barbeque” was used as a verb to mean the action of grilling any number of items and one usually assumed a group activity. So, when I moved to North Carolina and was told I would be going to a barbeque, my first question was, “what are we grilling?” Much to my astonishment, the response was a look of total confusion with a bit of concern for my listening skills. The response was “pork, of course.” And, there was one of my first ventures into the land of language gaps. In North Carolina, barbeque is always pork and it is a noun, not a verb. That is a very important distinction.
Similarly, in the land of mortgages and lending, language is incredibly important.
In 2011, we remodeled the lower level of our home and in November started the refinance process. My partner and I have gone through the mortgage and refinance process many times, and yet each time I get tripped up on the proper language. Legal terminology in documents regarding joint ownership of property is of extreme importance to same sex couples. And the difference between “Tenants in Common” versus “Joint Tenants with the Right of Survivorship” is like the difference between barbeque from North Carolina and barbecue from Louisiana.
When two or more people own property as Tenants in Common, there is no right of survivorship. When property is held between people as Joint Tenants with Rights of Survivorship, each person or “joint tenant” has an equal, undivided interest in the property. At the moment of death of one joint tenant, the title to the property passes automatically to the surviving joint tenant (or joint tenants), rather than to the heirs of the deceased joint tenant.
State law presumes that when a husband and wife jointly own property, that they hold it as Joint Tenants with Rights of Survivorship, with no need to specify that right of survivorship in the official records.
Because of the importance of this, when my partner and I set up our investment and other financial accounts, we always make sure that the official records for the accounts and the property indicate after our names that our joint property is titled as “JTWROS.”
In our last refinance, I was in a meeting and my cell phone buzzed with a number I did not recognize so I stepped out to take the call. It was my home mortgage consultant to finalize all the paperwork. He said, “now, lets’ clarify your titling, it will be ‘Tenants in Common,’ correct?” That is the standard method but offers no survivorship rights. It was a moment where a language slip could substantially change the rights my partner would have to our home if I were to pass away. Whether we are planning our Saturday cookout or our next financial move, we need to watch our language, just like momma always said.
This post has been provided for informational purposes only. Wells Fargo Advisors and its affiliates do not provide legal or tax advice. Please consult your legal advisor for more information regarding your specific situation.