There are now five principal ways of holding title to property: individual ownership, tenancy in common or co-tenancy, joint tenancy, tenancy by the entirety and in trust.

Outlined below are brief explanations of the similarities and differences in these five present ways of holding title with  to property. If you have any questions regarding any of them or any other manner of holding title to property, please contact our office.

1. Individual Ownership
2. Tenancy in Common or Co-tenancy Ownership
3. Joint Tenancy Ownership
4. Tenancy by the Entirety Ownership
5. Illinois Land Trust

a. How is it created?

The Deed or other document says "to John Doe."

b. Who is the owner?

John Doe is the sole owner of the property. He has full control of it. He may use it, live in it if it is a house, rent it to others, receive the income from it, and he may sell it.

c. What happens to it on the death of the owner? The owner, John Doe, may give it in his Will at his death. If he leaves no Will, it will pass to his heirs under the intestate laws of Illinois. In other words, if he is survived by his wife and two children, the property will pass one-half to his wife and one-half to his children. It will pass through what is known as his probate estate and will be subject to administration in the probate court.

d. Is property held in individual ownership subject to the debts of the owner?

Yes. The owner can mortgage the property. Liens created by the owner can attach to the property. A judgment against the owner can be made a lien against the property.

e. Who can sell and execute a deed to the property?

The individual owner of the property can sell it and execute a deed to the property.

a. How is it created?

The Deed or other document says

(1) "to John Doe and Jane Doe," or

(2) "to John Doe and Jane Doe, in equal shares;" or

(3) "to John Doe, a one-third interest, and Jane Doe, a two-thirds interest;" or

(4) "to John Doe, Jane Doe, Richard Roe," and so on.

b. Who are the owners?

(1) [Example 1 above] John Doe and Jane Doe are the owners of equal shares of one-half each. Each has full control of his or her one-half share. Each may use his or her share, live in it if it is a house, rent it to others, receive the income from it, and sell it. However, both must act in agreement if the entire property is to be sold or rented.

(2) [Example 2 above] John Doe and Jane Doe are the owners of equal shares of one-half each. Each may handle his or her own share only as described in (1) above.

(3) [Example 3 above] John Doe is the owner of a one-third interest, and Jane Doe is the owner of a two-thirds interest. Each may handle his or her own share only as described in (1) above.

(4) [Example 4 above] John Doe is the owner of a one-third interest, Jane Doe is the owner of a one-third interest, and Richard Roe is the owner of a one-third interest. Each may handle his or her own share only as described in (1) above.

c. What happens to the property on the death of the owner?

As to each owner*s share, the same things happen as if the property were in individual ownership.

d. Is the property subject to the debts of each owner?

Yes. Each owner can mortgage his or her interest in the property (if he can find a mortgagee who is willing to give him a loan with his interest in the property as security for the payment of the loan). Of course, both or all owners can mortgage all of their interest in the property. Liens created by one owner can attach to that owner*s interest in the property. Similarly, liens created by both or all owners can attach to all of their interests in the property. A judgment against one owner can be made a lien against that owner*s interest in the property. A judgment against both or all owners can be made a lien against all of their interests in the property.

e. Who can sell and execute a deed to the property?

One co-tenant can sell and execute a deed to his or her fractional interest in the property (if he or she can find a purchaser for only that interest). Both or all of the co-tenants can sell and execute a deed to all of their interests in the property.

a. How is it created?

The Deed or other document says

"To John Doe and Jane Doe, not in tenancy in common but in joint tenancy with full right of survivorship."

b. Who are the owners?

John Doe and Jane Doe are the owners of equal shares of one-half each in both examples given above. Each may handle his or her own share only as described above under "individual ownership."

c. What happens to the property on the death of one of the owners?

Upon John Doe*s death, the property passes automatically to Jane Doe. It does not pass under his Will. It does not pass to his heirs as intestate property. It does not pass through John Doe*s probate estate or through the probate court, nor is it subject to administration in the probate court.

d. Who can sell and execute a deed to the property?

Each owner can mortgage his or her interest in the property (if he can find a mortgagee who is willing to give him a loan with his interest in the property as security for the payment of the loan). The execution of a deed by one joint tenant has the effect of breaking the joint tenancy aspect of the deed, i.e., the survivorship interest is thereby terminated, and the tenancy is changed from a joint tenancy to co-tenancy. Of course, both or all owners can mortgage all of their interest in the property. Liens created by one owner can attach to that owner*s interest in the property. Similarly, liens created by both or all owners can attach to all of their interest in the property. A judgment against one owner can be made a lien against that owner*s interest in the property. A judgment against both or all owners can be made a lien against all of their interests in the property.

e. Is the property subject to the debts of each owner?

Yes. Each owner can mortgage his or her interest in the property (if he can find a mortgagee who is willing to give him a loan with his interest in the property as security for the payment of the loan). Of course, both or all owners can mortgage all of their interest in the property. Liens created by one owner can attach to that owner*s interest in the property. Similarly, liens created by both or all owners can attach to all of their interests in the property. A judgment against one owner can be made a lien against that owner*s interest in the property. A judgment against both or all owners can be made a lien against all of their interests in the property.

As of October 1, 1990, real estate may be held in tenancy by the entirety in Illinois.

a. How is tenancy by the entirety ownership created?

The deed, Will, or other document is made in favor of husband and wife only and says: "not as joint tenants or as tenants in common but as tenants by the entirety," as, for example: "to John Doe and Jane Doe, husband and wife, not as joint tenants or as tenants in common but as tenants by the entirety."

b. Who are the owners?

John Doe and Jane Doe are the owners of equal shares of one half each.

c. What happens to the property on the death of one of the owners?

Upon the death of one owner, the property passes automatically to the other owner. It does not pass under the decedent*s Will. It does not pass to the decedent*s heirs as intestate property. It does not pass through the decedent*s probate estate or through the probate court, nor is it subject to administration in the probate court.

d. Is the property subject to the debts of each owner?

No. The property is subject only to a debt of both owners. The property is not subject to the debts of only one owner. One owner cannot mortgage his or her interest in the property. Before the property can be made subject to a mortgage, both owners must execute the mortgage. A debt of one owner cannot be made a lien against the property. The only debt that can be made a lien against the property is a debt of both owners. A judgment against one owner cannot be made a lien against the property. A judgment must be against both owners before it can be made a lien against the property.

e. Who can sell and execute a deed to the property?

One tenant by the entirety cannot sell and execute a deed to his or her interest in the property. Only the two tenants by the entirety together can sell and execute a deed to their full interest in the property.

a. How is it created?

The Deed or other document says "to John Doe (or financial institution) as Trustee." A trust is formed by an agreement between the person who has the beneficial interest and the trustee. The person who has the beneficial interest can also act as trustee.

b. Who is the owner?

John Doe as trustee is the title holder of the property. The owner is the person or persons who have beneficial interest and power of direction and have full control of it. Any person or trust institution may act as trustee. If a bank or trust company is used, there will be a fee for taking title, an annual fee and a fee for taking title out of trust. The beneficiary may use it, live in it if it is a house, rent it to others, receive the income from it, and may sell it.

c. What happens to it on the death of the owner? Ownership passes under the trust to the person or persons named therein without the necessity and expense of probate. A land trust can save unnecessary delay and costs of probate. The six month minimum probate time in Illinois is avoided. The probate cost, amounting to as much as 10% or more of the value of your property is saved.

d. Is property held in a land trust subject to the debts of the owner?

Yes. The owner can mortgage the property. Liens created by the owner can attach to the property. A judgment against the owner can be made a lien against the property.

e. Who can sell and execute a deed to the property?

The person who has the power of direction under the trust can sell it. The trustee executes a deed to the property.

What other advantages are there to a land trust?

When title to your property is held in a land trust, your ownership need not show in public records, yet you may exercise all of the rights of ownership. Judgment claims entered against a beneficiary do not automatically become liens on the real estate. Marital or other difficulties of one beneficiary do not affect the interest of the other beneficiaries. A land trust can be set up to permit you to control the property without the problems of marital rights attaching. Your beneficial interest is personal property and thus your spouse need not join in signing mortgages, leases or deeds.

Ownership can be in several persons simply by having more than one beneficiary of the trust. The ownership can be as joint tenants or tenants in common with each beneficiary having an undivided interest. The interest can be treated separately when providing for succession of interest upon the death of a beneficiary. A land trust gives you all of the benefits which motivate the average person to use joint tenancy, but without creating the hidden problems often incumbent through use of joint tenancy such as unexpected Federal Estate, Gift and/or Illinois Inheritance taxes.