One important question you’ll need to answer during your real estate purchase is how to take ownership of the property, i.e., how to hold title. How you hold title has a significant effect in the event of death, so it is important that you have it set up so that it’s the most advantageous to you, your spouse, family, partner or company.
Sole Ownership—Ownership by an individual or other entity
- A Single Man or Woman. A man or woman who is not legally married or in a domestic partnership.
- A Married Man or Woman as his or her sole and separate property. A married man or woman who wishes to acquire title in his or her name alone. In this case, the title company insuring title will require the spouse to sign off on the fact that they will have no legal right to the property.
Co-Ownership—Ownership by two or more people.
- Community Property. Property owned together by a married couple.
- Community Property with Right of Survivorship (most common for married couples). Property owned together by spouses. If one person dies, that person’s interest ends and the property is entirely owned by the surviving spouse.
- Joint Tenancy. Property is owned by two or more people who may or may not be married and in equal interests. When a joint tenant dies, the property is automatically conveyed to the surviving owner(s).
- Tenancy in Common. Property is owned by any two or more people in undivided fractional interests. These fractional interests may be unequal in quantity or duration and may be executed at different times. Each tenant in common owns a share of the property and may sell, lease or will his or her share of the property.
- A corporation is a legal entity made up of one or more shareholders but is regarded under law as having an existence separate from the shareholders.
- An association of two or more people who can conduct business for profit as co owners.
- Trustees of a Trust. Legal title to property is transferred by the grantor to a person called a trustee. The property is held and managed by the trustee for the benefit of the people in the trust agreement.
Limited Liability Companies (LLC). An LLC is a legal entity considered to have a separate existence from its owners. The LLC will have an operating agreement that will determine how it functions and is taxed.