How to Hold Title in Delaware

How to Hold Title in Delaware

Title in Delaware can be held in 4 ways (plus some trust formats). Each Tenancy has its own advantages and disadvantages and it is important to choose correctly. It is important to talk to an Attorney about how to hold title and why because it is very specific to each set of facts. See below for a basic overview of each tenancy.

Sole Owner

An undivided ownership interest by one person with no other party having a right or interest in or to the property.

Tenants By The Entirety

An undivided interest by both husband and wife, with the right to the entire property passing to the surviving spouse upon the death of one spouse. Tenants by the entirety provides some protection from individual creditors and is the presumed tenancy for married couples.

Protections example: Andy and Beth are a married couple. Andy gets a personal loan for $10,000 from Joe and doesn’t pay it back. Joe can’t put a lien on the house because Beth didn’t sign for the loan as well.

Joint Tenants

An equal ownership interest by all parties named on the deed with rights of ownership vesting in the survivor of all owners. However, if a
joint tenant sells their share, the joint tenancy breaks and becomes a tenancy in common.

In DE there is a presumption against Joint Tenancy, therefore it must be stated clearly in the deed’s granting title (“this property is conveyed to Andy and Beth as joint tenants with rights of survivorship and not as tenants in common”).

Example: Andy, Beth, and Charles own Black Acre one-third (1/3) each. If Beth dies, Andy and Charles will each own one-half (1/2) of Black Acre.

Tenants In Common

An individual ownership interest in a portion of the property (either equal or unequal) with another party and sharing a common interest and right to use as to the whole, and unrestricted freedom of the owner to convey his or her portion of the property. Tenancy in Common DOES NOT PROVIDE for survivorship rights. Thus, a will is recommended to identify the recipient of the ownership interest upon the death of one of the owners. In Delaware, Title is presumed to be held Tenants in Common unless stated otherwise or a couple is married.

Example 1: Andy, Beth, and Charles own Black Acre. Beth owns seventy percent (70%), Andy owns twenty percent (20%), and Charles owns ten percent (10%). Charles dies. Charles has a will that states that his interest should pass to his mother, Charlene. Charlene now owns a ten percent (10%) interest in Black Acre. If Charles dies without a will, his interest will pass according to the laws of the State of Delaware.

Example 2: Andy and Beth are married but own Black Acre with Charles. Andy and Beth own a sixty percent (60%) interest in Black Acre, which they hold as Tenants by the Entirety. Charles owns a forty percent (40%) interest in Black Acre. As between Charles and the unit made up of Andy and Beth, the parties own Black Acre as Tenants in Common, forty percent (40%) to Charles, and sixty percent (60%) to Andy and Beth jointly.