How to Hold Title to Real Property

When buying a home, you'll be asked how you want to hold title to the property. Give this some thought. The way you hold title to real property can have serious legal consequences.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Real Estate Attorneys

1. Know that sole proprietorship means ownership by an individual or other entity capable of acquiring title. You'll sign as: a single individual (meaning you have never been married); an unmarried individual (meaning you've previously been married and are now legally divorced); or a married individual acquiring sole and separate property (meaning you are a married person acquiring title in your name alone - your spouse relinquishes right, title or interest).
2. Know that joint tenancy is for any number of persons, including husband and wife, and ownership interest cannot be divided. There is only one title to the entire property, with equal right of possession for all owners. Upon the death of one of the co-owners, that person's interest ends and cannot be willed. The survivor owns the property by right survivorship.
3. Know that tenancy in common also allows any number of persons, including husband and wife, to hold title together. In this case, ownership can be divided into any number of interests, equal or unequal; for example, one owner can own 60 percent, and the other 40 percent. Each co-owner has separate legal title to his or her undivided interest, and each person may sell, lease or give away his or her share. Upon death, each interest passes by will to heirs. There is no right of survivorship.
4. Know that community property is only available to a husband and wife, allowing equal ownership interest to each. Both parties have equal right of possession, and both must join in transferring real property. Upon the death of a co-owner, half of that person's interest goes to the survivor and other half goes by will or succession to heirs.

Tips & Warnings

• Title can also be held by a corporation, a partnership or a trust.
• For further information, contact a real estate attorney.
• The form of ownership taken, or how title is vested, will determine who may sign various documents involving property, and future rights of the parties to the transaction, including matters involving real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditors' claims.
• How title is vested can have significant probate implications in the event of death.