Sarah, Tom, and Linda are co-owners of a vacation property. Their ownership agreement states that if any one of them passes away, their share will automatically go to the remaining co-owners. Recently, Tom unexpectedly died. What is the current ownership status of the property?
The property ownership reverts to the original owner from whom Sarah, Tom, and Linda acquired it.
The ownership is divided into separate individual shares for Sarah and Linda without any automatic transfer.
Tom's share is transferred to his heirs, while Sarah and Linda maintain their existing ownership percentages.
Sarah and Linda become joint owners of the property.
Upon Tom's death, his ownership interest is automatically transferred to Sarah and Linda, making them joint owners of the property. This follows the agreement's provision for automatic transfer upon a co-owner's death. The other options are incorrect because Tom's share does not pass to his heirs, the ownership does not convert to separate shares without action, and the property does not revert to the original grantor or a third party.
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What does it mean for Sarah and Linda to be joint owners after Tom's passing?
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What is an automatic transfer in terms of property ownership agreements?
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Why don't Tom's heirs receive his share of the property?