Before you can make an informed decision on how to hold title on your real estate, it is essential to first understand the specifics of each type of ownership holding, their advantages, their details. The following methods of holding title are the more common methods.
Sole ownership is a title that can only be held by single individuals or single entities with the ability to acquire property. For properties owned by two or more people, the most common methods of holding title include:
Joint Tenancy - A form of vesting title on property owned by two or more persons. The advantage to this type of vesting is being able to avoid the probate process in the case one owner should pass. Due to the principle of Right of Survivorship the property's ownership interests automatically transfers to surviving joint tenants without delay. A summary of some main characteristics of this type of vesting are:
- Ownership interests between parties must be equal.
- Each individual owner can transfer their title or interest but the vesting will become a
TIC.
- Owner's debts cannot be forced upon co-owner, but the forced sale of the property may occur.
- In the case of a death of one owner, ownership interest automatically transfers to co-owner.
Tenancy-in-Common (TIC) - A form of vesting title on property by two or more persons together. In this type of vesting, the individual owners may transfer ownership to any individual and upon an owner's passing, ownership interests can also be transferred depending on the decedent's will. A summary of some main characteristics of this type of vesting are:
- Ownership interests can be divided among parties in any way desired.
- Each individual owner can transfer their title or interest freely.
- Owner debts cannot be forced upon co-owner(s), but the forced sale of the property may occur.
- In the case of a death of one owner, ownership interest transfers according to will or intestacy.
Community Property - A form of vesting title on property by husband and wife or domestic partners. A summary of some main characteristics of this type of vesting are:
- Ownership interests between parties must be equal.
- Any and all transfers must be agreed upon by both owners.
- Both owners are responsible for debts and forced sale of the property will occur to pay debt off.
- In the case of a death of one owner, ownership interest transfers to spouse unless otherwise indicated via will.
Community Property with Right of Survivorship - A form of vesting title on property by husband and wife or domestic partners. This type of vesting is different from standard community property in that it has a Right of Survivorship--it removes the disadvantage of community property vesting and allows for automatic transfer of ownership without delay. A summary of some main characteristics of this type of vesting are:
- Ownership interests between parties must be equal.
- Any and all transfers must be agreed upon by both owners.
- Both owners are responsible for debts and forced sale of property will occur to pay debt off.
- In the case of a death of one owner, ownership interest automatically transfers to co-owner.
