How To Hold Title To Your Home

 Posted on January 05,2017 in Real Estate

In economic times with an active real estate market, many people change homes or buy a first home. Many buyers give little thought to how to take title to the home. But this decision is vital, as it affects who can sign documents regarding the property and how the property can be transferred in case of death. Here are some common ways to hold title to a home.

• Sole ownership. This is how an individual holds title to property. This ownership form does not apply to property bought by married couples. However, if a married couple wants to put title in the name of one spouse, the deed could say the spouse is "sole owner."
• Community property. For husbands and wives in "community property" states, this is one of the main ways the couple can hold property. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, if a married couple acquires property and the deed says they are husband and wife, or is not clear about how they intend to hold title, the law presumes it's held as community property. Each spouse owns an equal interest in community property and each may manage it. Both spouses need to sign an agreement for a transfer to be recognized.
• Joint tenancy. This ownership form is available when two or more co-owners each have an equal share of property. The deed must say title is taken as "joint tenants." Each joint tenant is an equal co-owner of an interest in the entire property. The key characteristic of joint tenancy is that when a co-owner dies, his or her ownership interest goes to the other co-owners. Ownership passes by law, not by a will. Because of this feature, eventually the last surviving joint tenant will own the entire property. If two people want the other person to receive their interest in case of death, joint tenancy would be an ownership form to consider. In contrast, if a co-owner wants to be able to give away his or her interest in a will, joint tenancy would not be a good way to hold title.
• Tenants in common. If property held by two people is not community property or joint tenancy, it's a tenancy in common. Tenants in common are also co-owners of property. Unlike joint tenancy, though, interests of tenants in common need not be equal. Also, each tenant in common can pass his or her interest by a will. As a result, the remaining tenants in common could find themselves owning property with somebody else. If two or more people own property and each wants to be able to give away his or her interest by will, they should consider holding title as tenants in common.

How title is held has important tax, estate and other implications. Therefore, seek professional help when deciding how to hold title to property you own.