Types of Real Estate Ownership in Ohio: What Every Homeowner Should Know

When you're buying a home, getting married, or planning your estate in Ohio, one of the most important decisions you'll make is how to hold title to your property. The way you own your real estate affects everything from your day-to-day rights as a homeowner to what happens to your property when you pass away.

Let's break down the most common types of real estate ownership in Ohio in simple terms, so you can make the best choice for your family's situation.

Sole Ownership: Going It Alone

Sole ownership is exactly what it sounds like: you own the property all by yourself. This is the simplest form of ownership, where one person (or an entity like a business) holds complete title to the property.

Example: Lisa, a single professional, buys her first condo in Columbus. She's the only name on the deed, so she has sole ownership.

With sole ownership, you have complete control over the property. You can sell it, refinance it, or leave it to whoever you want in your will without needing anyone else's permission. However, when you pass away, the property will go through probate unless you've set up other arrangements like a trust or transfer-on-death designation.

Tenancy in Common: Sharing Ownership (But Not Survivorship)

Tenancy in common is the most common way for multiple people to own property together in Ohio. Each owner has an "undivided interest" in the property, which means everyone can use the entire property even though they might own different percentages.

Example: Two friends, April and Amy, buy a duplex as an investment property. Each will typically own 50% of the entire property, but both can live in or rent out either unit because they each have rights to the whole property.

Here's what makes tenancy in common unique: when one owner dies, their share doesn't automatically go to the other owners. Instead, it passes according to their will or, if they don't have a will, according to Ohio's inheritance laws.

Real-world scenario: If April passes away, her 50% share would go to her children (named in her will), not to Amy. Now Amy owns 50%, with April's kids owning 50%. This can sometimes create complicated situations, especially if the new co-owners have different ideas about what to do with the property.

Joint Tenancy with Right of Survivorship: The Automatic Transfer

Joint tenancy with right of survivorship (JTWRS) is a popular choice for married couples and family members because it includes that magic phrase: "right of survivorship."

Example: Jim and Lois, a married couple, buy their family home "as joint tenants with right of survivorship." This specific language on their deed is crucial: without it, they'd default to tenancy in common.

The key benefit? When one owner dies, their share automatically transfers to the surviving owner(s), regardless of what their will says. This happens outside of probate, which can save time and money for surviving family members.

Real-world scenario: When Jim passes away, Lois automatically becomes the sole owner of their home. She doesn't need to wait for probate court or worry about Jim's will: the property is hers immediately upon presenting Jim's death certificate and some simple paperwork.

Transfer on Death (TOD) Deeds: The Best of Both Worlds?

Ohio allows Transfer on Death Affidavits, which let you keep sole ownership during your lifetime while designating who gets the property when you die.

Example: Maria, a widow, wants to leave her house to her three adult children but doesn't want to deal with the complications of joint ownership while she's alive (which is smart, because this is typically a bad idea). She files a TOD affidavit naming all three children as beneficiaries.

During Maria's lifetime, she maintains complete control: she can sell the house, refinance it, or even revoke the TOD designation if she changes her mind. When she passes away, her children automatically inherit equal shares as tenants in common, avoiding probate.

Important note: If you name multiple beneficiaries on a TOD deed, they'll need to agree on all future decisions about the property. This can sometimes lead to family disputes if siblings have different ideas about selling or maintaining the property.

Tenancy by the Entirety: A Thing of the Past (Mostly)

You might come across this term if you're dealing with older property records. Tenancy by the entirety was a special form of ownership available only to married couples, with strong asset protection benefits.

Ohio stopped allowing new tenancy by the entirety deeds in 1995, but if your parents or grandparents created one before that date, it's still valid. These older deeds provided excellent protection from individual creditors: if one spouse had debts, creditors generally couldn't touch property held as tenancy by the entirety.

How Your Choice Affects Inheritance and Probate

The type of ownership you choose has huge implications for your family:

Probate impact: Sole ownership and tenancy in common typically require probate when an owner dies. JTWRS and TOD deeds avoid probate by transferring ownership automatically.

Family harmony: Consider how your choice might affect relationships. Joint ownership can sometimes create conflicts when co-owners disagree about property decisions.

Tax implications: Different ownership types can have different tax consequences, especially for estate taxes and property tax assessments.

Medicaid considerations: Many types of land ownership may impact an individual's eligibility for Medicaid.

Asset Protection Considerations

Your ownership choice also affects how well your property is protected from creditors:

• Sole ownership offers no special protection: creditors can generally reach your property to satisfy debts
• Tenancy in common provides no additional protection for your share
• JTWRS may offer some protection, depending on the circumstances
• TOD deeds maintain the same protection level as sole ownership during your lifetime

For families with asset protection concerns, these ownership choices should be part of a broader strategy that might include trusts or other legal structures.

Making the Right Choice for Your Family

Choosing the right ownership type depends on your specific situation:

For married couples: JTWRS is often preferred for primary residences because of the automatic survivorship benefit, but consider TOD deeds if you want more flexibility.

For investment properties: Tenancy in common might work better if you want control over who inherits your share.

For single parents: TOD deeds can be excellent for avoiding probate while maintaining full control during your lifetime.

For adult children buying together: Carefully consider whether you want survivorship rights or prefer that each person's share goes to their own heirs.

Getting Professional Help

While understanding these ownership types is important, choosing the right one for your situation often requires professional guidance. A qualified estate planning or real estate attorney can help you understand the implications of each choice and ensure your deed is properly prepared.

The language on your deed matters tremendously: small differences in wording can completely change your ownership rights and what happens to your property after you're gone. This is why DIY deeds are often disasters, with many unintended consequences.

Making informed decisions about property ownership is one of the most important things you can do for your family's financial security. Take the time to understand your options, consider your long-term goals, and get professional advice when needed. Your family's future may depend on the choice you make today.