Texas Real Estate State Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is Tenancy in Common because this type of ownership allows each co-owner to have an individual share of the property. When a co-owner in a Tenancy in Common passes away, their share of the property is transferred to their heirs according to their will or the laws of intestate succession, rather than to the surviving co-owners. This means that ownership remains distinct and passes on as specified by the owner’s estate plan or state law, allowing for a clear path to heirs.

In contrast, Joint Tenancy includes the right of survivorship, which means that if one owner dies, their share automatically passes to the remaining owners, not to their heirs. A Life Estate pertains to a situation where ownership is granted for the duration of a person's life and, upon their death, the property reverts back to the original grantor or a specified remainderman rather than going to heirs. Trusts are legal arrangements that can hold property for the benefit of certain parties but do not inherently dictate how ownership transfer occurs upon death like Tenancy in Common does.