Four investors — Wei, Priya, James, and Sofia — purchase a commercial property in Sioux Falls as joint tenants. Two years later, James conveys his interest to his LLC without the knowledge of the other three. One year after that, Wei dies intestate. What is the correct description of the ownership structure immediately after Wei's death?
Correct Answer
B) Priya and Sofia each hold a one-third interest as joint tenants, and the LLC holds a one-third interest as a tenant in common.
This question requires tracking two sequential events. First, when James conveyed his interest to his LLC, that conveyance severed the joint tenancy only as to James's one-quarter share. The LLC, having acquired its interest at a different time and through a different instrument, cannot be a joint tenant. So after James's conveyance: Wei, Priya, and Sofia remain joint tenants among themselves (each holding a one-quarter share of the joint tenancy, totaling three-quarters), and the LLC holds a one-quarter interest as a tenant in common. Second, when Wei dies, his right of survivorship operates only among the remaining joint tenants — Priya and Sofia. Wei's one-quarter joint tenancy interest passes automatically and equally to Priya and Sofia by survivorship, giving each of them a one-quarter share of the original whole, or together two-thirds of the property. The LLC's one-third interest (one-quarter of the whole) is unaffected by Wei's death because the LLC is not a joint tenant. Result: Priya holds one-third, Sofia holds one-third as joint tenants with each other, and the LLC holds one-third as tenant in common.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
Riparian rights concern properties bordering flowing bodies of water (rivers, streams), while littoral rights concern properties bordering non-flowing bodies of water (lakes, oceans).
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