How to Hold Title

When purchasing a property, many buyers don’t think about how they will hold the title to their new home or investment property until they sign the closing documents.  Taking title may actually have serious ramifications later, if not properly filed, especially if the property is owned by multiple buyers.  Some of the most common ways to hold title is sole ownership, community property, community property with right of survivorship, joint tenants, or tenancy in common.

What’s right for your situation?

Married Couple

When a married couple holds title, the most common form is community property with right of survivorship.  This means tha

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t if one spouse dies, the property is automatically transferred to the surviving spouse.

Single Man or Woman

Most single people will elect to take title by sole ownership as a single man or woman, or if they have been married the title would be held as an unmarried man or woman.

Partnership

Many real estate partners will choose to hold title as joint tenancy, which means all parties own the property equally.  If one partner dies, the property transfers to the remaining partner without going through probate.  If the partners hold title as tenancy in common, and a partner dies, the property of the deceased person can be left to someone else, but still must go through probate first.

Adding Names to Title

It’s crucial to be mindful when adding a name to a family member’s property title. If the person is added as a joint tenant the tax assessor will reassess the value of the property to the current market value - this means the taxes will go up!

Make sure you contact your CPA or lawyer if you are not sure about the best way of taking title to a new property.