Real Property Ownership in Wyoming

In Wyoming, there are several ways to own real estate, known to the legal community as ‘real property’.  The ways a person can own real property includes sole ownership, Tenants in Common, Joint Tenancy and ownership through an entity, like an LLC, Limited Liability Company.   Here are a few examples of the different types of ownership, and how each differ from one another.

What are the types of ownership of real property in Wyoming?

The first and simplest type of ownership is sole ownership.  Sole ownership means exactly as it sounds.  If you are the sole owner, you own the entire parcel and you don’t share an interest with anyone.  You have sole control of the property.

Tenancy in Common is two or more people owning a property together, but possibly not in equal shares.  Each person has equal and undivided rights to all of the property, no matter the percentage of the property they own.  If someone passes away, their share of the real property goes to their heirs, instead of automatically being transferred to the other owners.

Joint Tenancy is two or more people owning a property together. If one person passes away, the ownership automatically transferred to the remaining owners. They share the property equally.

Tenancy by the Entireties is a form of Joint Tenancy, only held by married couples.  It is an additional protection of tenancy by the entireties in Wyoming is that if both spouses do not participate in the creation of a debt, a creditor cannot take the property away to satisfy the debt.

What is the difference between Tenancy in Common and Joint Tenancy?

Tenancy in Common is like having undivided ownership of a treehouse.  You share ownership with Sam, but each of you has undivided access to the property, no matter what percentage of the property you own.  If you want to sell or give away your part, you can do that without asking Sam.  If you pass away, your share of the property goes to your heirs, not automatically to Sam.

However, Joint Tenancy is like owning the treehouse together as one big team. You both share the whole treehouse equally. If one day you pass away, Sam automatically gets your share, and if something happens to Sam, you'll automatically get his part.  It's like you and Sam are one team and share everything.

So, in simple terms, Tenancy in Common means you have your own part and can do what you want with it, while joint tenancy means you and your friend own everything together and share it equally.

What is the difference between Joint Tenancy and Tenancy by the Entireties?

Imagine a family with a husband (John), a wife (Jane), and their daughter (Sara). They decide to buy a house together, as joint tenants.  In this case, each family member has equal and undivided ownership of the entire house.  If something happens to any one of them, their ownership automatically passes to the other family members.  For example, if John passes away, Jane and Sara will still own the whole house together, and vice versa. This automatic transfer of ownership happens without the need for probate.

Now, let's say John and Jane decide to buy another property, like a vacation cabin, using Tenancy by the Entireties. This form of ownership is available only to married couples. In Tenancy by the Entireties, the couple is considered as one legal entity, rather than two separate individuals. So, the cabin is owned by "John and Jane" as a single unit.  If anything happens to John or Jane, the other spouse automatically becomes the sole owner of the entire cabin.

The main differences between Joint Tenancy and Tenancy by the Entireties lies in the relationship of the owners and creditor protection.  Joint Tenancy can involve any group of individuals (even non-relatives), while Tenancy by the Entireties is specific to married couples.  With joint tenancy, a creditor of one joint tenant can attach the property of the joint tenant to satisfy a debt.   With tenancy by the entireties, if both spouses do not participate in the creation of the debt, the property is immune from attachment by creditors of one spouse.

What is the difference between sole ownership and ownership by an entity, like an LLC?

Imagine you, "Sarah”, own a piece of land in Wyoming.  You are the sole owner, meaning you have complete control over the property. You make all the decisions about what to do with the land, like building a house or starting a farm. However, if someone sues you or you have financial problems, your personal assets (like your savings or car) could be at risk since there's no legal separation between you personally and the property.

Let's say, instead you decided to create an LLC in which to own the land. You are the owner of the LLC, and the land is owned by the LLC, not directly by you.  Having the LLC the legal owner of the property offers you some advantages:

a.         Your LLC provides limited liability protection. As the name suggests, if someone sues the LLC, or the property faces financial troubles, your personal assets are generally protected.  Only the assets owned by the LLC are at risk, not your personal belongings.

b.         Putting the property in the name of the LLC is useful if you want to involve other people or investors in the property.  Also having an LLC can make the management and transfer of ownership interest more straightforward.

c.         With an LLC, you can have multiple members (owners) of the real property, and jointly, can decide how to run things together. It allows for more flexibility in decision-making compared to being the sole owner.

It's important to note that creating an LLC involves some paperwork and costs, but it can be a beneficial option, if you want to protect your personal assets and have a more organized approach to managing and potentially expanding your property in the future.  In Wyoming, as in many other states, LLCs are commonly used for real estate ownership and various business ventures.

How you own property can have important consequences.   Knowing how you own the property, the rights of survivorship, creditor protection and management of the property are important considerations in choosing the type of ownership you want. Need help decided what kind of ownership you want over a property? The Lubnau Law Team can help. Give us a call at (307) 682- 1313.