Joint Tenants in Common (JTIC)
What it is:
Joint tenants in common (JTIC) is a type of ownership wherein two or more individuals jointly own a property or portfolio of assets. If one owner dies, his or her portion of the property or portfolio remains in his or her name.
How it works (Example):
Individuals who jointly own assets or property in common each own a discrete portion. Typically, these portions are divided equally among all owners (for example, two owners would each have 50% ownership). If one owner dies, his or her portion becomes part of his/her estate and may be bequeathed to his/her heirs as part of a will. In other words, his/her portion of the property is not automatically allocated among the remaining owners.
For example, suppose Bob and Jack are joint tenants in common of an investment portfolio. Each own 50% of the portfolio. If Bob dies, Jack continues to own 50% of the portfolio, but Bob's 50% portion may be passed on his heirs as part of his will. Jack does not become the portfolio's sole owner.
Why it Matters:
It is important not to confuse JTIC with joint tenancy. Under joint tenancy, ownership rights and obligations are immediately distributed among remaining owners in the event that one owner dies. Under JTIC, the ownership portion of a deceased owner may be allocated among remaining owners only if the inheritor chooses to sell the ownership portion to them.