Property Title Options
When purchasing a home, it is important to take into consideration how you want to hold title. There are several different ways in which you can hold title. If you choose the wrong option, your decision could come back to haunt you, particularly if you decide to sell the house or get divorced, or if one of the homeowners passes away. If you are unsure of what type of property ownership best fits your needs, it is best to consult a real estate lawyer for advice.
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Tenancy in Severalty
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Owning a property in tenancy in severalty is a fancy way of saying that you are the only owner of a home. This option for home ownership is usually used by single adults purchasing a house. If you are a single adult who owns a property and you pass away, the house will go to whoever is listed in your will. There is no automatic heir to a property held in this manner. In some states, this type of ownership may also be referred to as sole tenancy.
Joint Tenancy
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Joint tenancy allows more than one person to own a property equally. If there are two owners of a property vested in joint tenancy and one dies, the other owner will automatically be entitled to full ownership of the property. If you are buying the house with your spouse, this may be your best option for ownership in some states. Although joint tenancy is often used by spouses, duos or trios of all types can own a property in joint tenancy.
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Tenancy by the Entirety
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Tenancy by the entirety is similar to joint tenancy, but is limited to married couples. It is important to remember a few things when owning a home in this fashion. Only some states allow this, so it is important to know your local real estate laws. Think of tenancy of the entirety as a bond that cannot be broken. All decisions about the property must be made together. Joint tenancy, on the other hand, can be voided if one of the owners wants to give up his share.
Tenancy in Common
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Tenancy in common is the optimal way to hold title if you are purchasing a vacation or rental property with a group of friends or siblings. When one of the tenants in common dies, the other homeowners do not have claim to that tenant's portion of the home. For example, if you, your sister and your cousin all own a house and your cousin passes away, your cousin's heir would inherit her portion of the house. You and your sister would then have to update the title to begin a new tenancy in common with that person.
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