 Estate planning clients are often surprised to find that the title to the property that they thought they own, is actually a joint title, or some other form of ownership with another person. What does this mean and how does that impact your control over this property? Title refers to a document that lists the legal owner of a piece of real property, which includes the land, the construction on it, and the rights to use it. When transferred title must be cleared. Clearing a title for real property means determining that it is free of liens or encumbrances that could pose a threat to its ownership. The most common types of real estate title are sole ownership, joint tenancy, tenancy in common, and community property. Sole Ownership
Real property owned by an individual or entity. Positive: ease of sale and transaction, no consent for improvements or refinancing. Negative: transfer on death can be very problematic, if there is no will or trust. Joint Tenancy Joint tenancy means two or more people hold joint title to real estate, in equal shares, (50%, 33%, etc.) and have equal rights to enjoy the property during their lives. Ownership passes to the remaining title holders. Positive: equal access to property and right of survivorship without a court procedure. For purposes of estate planning, ownership will pass to the surviving person on the title, regardless of their designation of heirs. Negative: Shared and equal responsibility for injuries occurring on the property or obligations against the property, like debts, loans, and mortgages. Any refinancing must be approved by other join-title holders. Regardless of whether a joint-title holder lives at the property, pays for the mortgage, pays for maintenance, gets any benefit from the property, or tries to assign it to his heirs, the surviving joint title holder will get the deceased owners share. Tenancy in Common Owners hold title to real estate jointly, with equal or unequal percentages of ownership, but still have access to the entirety of the property. There is no right of survivorship. Positive: you can be a small percentage investor but still have access to the whole property, and can dispose of your share of property to other buyers or heirs. Obligations by single tenant are his own and only against his share. Negative: no survivorship rights, all tenants are still equally obligated for liabilities on the whole property if incurred. Community Property/Community Property with Right of Survivorship California is a community property state. Community property is a form of ownership by husband and wife during their marriage that they intend to own together. Under community property, each spouse owns (or owes) everything equally, regardless of who earned or spent the money. Thus, each spouse gets an equal division of real estate property in the event of divorce or death. In California, if one spouse dies, community property passes to surviving spouse without a court proceeding. How do I know what my ownership is? Check your deed. Contact your county’s recorder’s office or look it up online. The recorded deed is what controls. This is often, and unfortunately, different than what clients believe they control or were told they control. Attorney’s must carefully examine the title that a client holds in order to determine the best approach for estate planning purposes. To speak to an attorney, please visit us at: www.aristovlaw.com/ Comments are closed.
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