There are numerous ways to own property, and each type has unique specifics regarding tax obligations, legal relationships, and asset transfer. The real estate professionals with Skeeters, Bennett, Wilson & Humphrey provide an overview of what you can expect with your assets and investments.
Different Property Ownership Categories
It’s important to not only understand the various ways to own property but also make sure that when you purchase or receive a piece of property, it’s properly designated in the type of ownership desired.
Sole Survivorship
This applies to property owned by one person. The name on the legal document would be that person alone. When that individual dies, the property becomes part of their probate estate and—if there’s a will that identifies transfer of ownership to a particular person or entity— is transferred to that recipient.
Additionally, you can own any type of asset in your individual name, whether it be stocks, real estate, bank accounts, or vehicles.
Joint Tenancy With the Right of Survivorship
Property with this designation is owned jointly by both tenants (individuals) and at the death of the first individual, the property automatically passes to the surviving joint individual, who then owns the property. In most states, property with a joint tenancy with the right of survivorship designation can be owned by any individual jointly, not just a married couple.
Also in some states, if the property is held jointly by a married couple, this arrangement might be referred to as tenants by the entirety.
Tenants in Common
This category identifies property owned together by more than one person but without the right of survivorship. You may have any number of tenants in common owning one piece of property. For example, if there are three owners, then each person owns one-third of the entire property. The fractional interest is treated as being owned by that individual.
A tenant in common can sell or transfer their own interest without the consent of the other tenants, but only their portion of the ownership, not the entire asset.
Community Property or Marital Property
Some states are known as community property states, sometimes also called marital property states. This type of ownership refers to property acquired by spouses during the marriage. Currently, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states. Upon the death of one of the spouses, one-half of the community property belongs to the surviving spouse, and one-half is included in the decedent’s estate.
However, any property owned by either spouse prior to marriage or acquired after marriage by gift or inheritance is considered separate property and not marital property.
Why a Real Estate Attorney Can Help
A qualified real estate attorney can help you with estate planning by providing transaction services, representing buyers and sellers in various stages of acquisition, and assuring that your property is fully secured for the future through essential asset protection strategies. Arrange for a consultation to determine what your next investment move should be.