When you bought your home, did you give much -- or any -- thought about how you'd title it? "Many homeowners don't think about it," says Matthew Drewes, an attorney at Thomsen & Nybeck in Bloomington, Minn. "Some don't even realize there are options until they show up at closing and are asked how they'd like their deed to read. At that point, they're pretty much on their own." How you title your home shouldn't be an afterthought. Here are some helpful tips and information about titling your new home or property.
Common Methods
- Sole ownership. Sole ownership is just what it sounds like: You hold the title in your name alone, even if you own the property with other people.
- Joint tenancy with the right of survivorship. This is a way to hold title in more than one person's name. All co-owners must take title at the same time; they own equal shares and the surviving co-owner winds up owning the entire property.
- Joint tenancy. Joint tenancy means that you and I own the property together, and if one of us dies, the other gets it without the property passing through probate," says Nancy Polomis, chair of the real estate development department at Hellmuth & Johnson PLLC in Eden Prairie, Minn. "In Florida, when you take title as husband and wife, it's deemed a tenancy by the entirety," says Roberto Blanch, an attorney at Siegfried, Rivera, Lerner, De La Torre & Sobel PA in Coral Gables, Fla.
- Tenancy in common. When two or more co-owners take title to real estate, especially if they are not married to each other, they often become tenants in common. Each tenant in common owns a specified interest in the property, which doesn’t need to be equal. “With tenancy in common, you and I own the property together," says Polomis. "But upon my death, my interest is distributed according to my will or if I don't have a will, according to state law.
Evaluate What’s Best for YOU.
There are other ways in which to title your property; these are just a few, so do your homework before proceeding. Carefully evaluate which form of title is right for your situation. "Ask yourself: Who do I want to end up with my interest in this property?" says Polomis. "Do I want it to be the person with whom I own it or someone else?" Here are a few common guidelines in your consideration. However, every scenario is different. It is highly recommended to speak with a tax advisor and lawyer before making your decision.
- Consider Sole Ownership if:
- You are single
- Consider Joint Tenancy if:
- You're married and want your interest to pass to your spouse upon your death
- One spouse has a high-liability occupation
- Consider tenancy in Common if:
- You’re in your second marriage
- You have a complicated family history.
- You're divorced with children, but own a home with a new partner
How to change your title
Changing how you've titled your property is relatively simple and inexpensive, but it's not for the uninformed. "It's risky to attempt the transfer of title without the advice of a lawyer or other professional. You may need to use particular words in your deed, and there may be tax implications. Get advice because there can be so many unexpected results."
Sources: Bankrate.com; LATimes.com; thebalance.com
Photo credit: Freepik
