I am sure you have heard that even famous people don’t always think about how their property should be deeded to them. This information is extremely important for all of us to know and understand, so our intentions are supported by the law on our property.
1. Sole ownership
If you are going to own the property by yourself, one of the ways to hold title to your home is in your name alone. This is also called “ownership in severalty”.
When a single person with title to real property is in his or her name decides to get married, the spouse may be asked to sign a quitclaim deed giving up any ownership interest in the property, and they would have to choose among the options listed below.
2. Tenants in common
If you decide to buy real estate with one or more of your friends, and you all will take title, you and your friends often become tenants in common. This may be an option if you buy a home with a friend as an investment. Each of you will have to determine how much interest you want to have. It need not be equal – the shares may be 60-30-10, for instance, depending on how much money was invested or how much work has been assigned.
If something happens to one of the friends, their share would go to someone they specified or to their heirs. The challenge is that the other friends would be in ownership with someone they potentially do not know or with whom they would prefer not to be in ownership. Tenancy in common property is subject to probate court costs and all of the challenges that can represent.
3. Joint tenancy with right of survivorship
When title is held in joint tenancy with right of survivorship, owners may take title at the same time, and they own equal percentage in the property. If something happens to an owner, all of the ownership is passed to the surviving owner(s). This concept will help to avoid probate, and normally, just a death certificate will clear the title into the one owner’s name.
4. Living trust
My opinion on the best way to hold title to homes and other real property is in a revocable living trust. There are many advantages, such as avoidance of probate costs, and your wishes are best followed in this manner.
There is a potential up-front cost of creating a living trust and deeding real property into the living trust, but there are no negative sides that I can see. Give me a call and I can connect you with a cost-effective attorney who can help you with this.
Stocks, bonds, bank accounts, automobiles and other major assets can also be held in a living trust. Since the living trust is revocable, these assets can be bought, sold, and financed as usual.
Until the death or disability of the trust creator, the home and other real estate and/or assets in the living trust are treated normally.
This would have been a great way for the beloved Aretha Franklin to have placed all of her assets into a trust prior to her passing, so all of her loved ones would have been protected with her wishes.
No matter what your questions are, feel free to click on “Ask Annette a Question” or call me. I’m always here earning the right to be your real estate resource and real estate agent!
I care about you!