What is Joint Administration? The concept of joint ownership, basically, refers to a situation in which one person owns a certain asset or property, while another person or persons own the same asset. In a simple example, let us say that Robert has purchased a particular asset, Bob, a month before. Robert and Bob are related by blood, or they have been related since birth, and they are the same person. Therefore, Bob is Bob’s uncle or aunt, and he is the owner of the asset.
Joint ownership is an acceptable solution when one or more couples live together, are cohabiting as a married couple, or when one or more people are legally assigned the ownership of jointly held assets by choice. For example, Bob and Jane are married and are living separately, Bob lives in Florida, and Jane lives in Washington D.C. They each have a retirement account, checking account, and money in savings accounts, and they both want to invest their money in each other’s accounts. So, instead of dividing up the assets, each person retains his or her portion, and they make regular monthly deposits into their accounts. Joint ownership permits each of them the flexibility to save for retirement, buy a home together, pay for college, and many more things.
What is a limited liability company, or LLC, and why would you want one? Many people think of LLCs as being a set of individual or partnership debts, which the partners share together. A limited liability company is just that-a company that has two separate owners, with one owner holding “limited” and the other owner holding “complete” control. Therefore, in case of a lawsuit, one owner is considered the “limited” owner and the other is considered the “complete” owner, but not necessarily so.
What is the difference between a “sole proprietorship” and a “multi-owner” partnership? Usually a sole proprietorship involves only one party. However, if more than one person joins the joint ownership agreement, then the business can be considered to be multi-owner. When more than one person signs on as either owner, it is called a “joint tenancy.”
What are a corporation and why would you want to form one? A corporation is merely an informal group that exists solely for the purpose of conducting business. Unlike a sole proprietorship or partnership, a corporation may own a great deal of real property and assets, but is not allowed to spend that money without formal approval from a governing board. Thus, if a corporation is created as a joint tenancy, all of the members are automatically entitled to vote, and must share in the corporation’s profits.
What are the real property and why do you need it when getting into a joint ownership agreement? Real property can be shared throughout a joint ownership agreement, and is often held in trust. The majority of individuals do not need the use of real estate to live their lives because they have their own homes. However, some business owners may benefit from the value of the home, as well as the tax deductions they receive. This allows them to pay less in taxes, and gives them the ability to purchase more expensive pieces of real estate if they so choose.
What is liability on the property? Will all of the joint tenancy parties be held responsible for any damage to or theft of the property? Some will try to claim that they have never been negligent in paying the bills, while others will claim they only owed the mortgage and nothing more. This is referred to colloquially as “the limit of liability.” A simple example of this could be that one partner is responsible for the monthly payment on the mortgage, while another has only contributed the amount. If one of the joint venturers has committed fraud, the liability could exceed the actual value of the assets, which can result in serious financial difficulties for all of the members.
What is joint ownership in a property? Joint tenancy is often the basis for a rent-to-own deal, or other business arrangements that allow the owners of property to live in it while they do not personally own it. This allows the owners to stay in the property and pay rent, while receiving an income from the rental. However, it is important to understand that there are limits to the liability of the joint-owners. These can include but are not limited to: