Options for Holding Title
Before you reach the closing day, you will want to make a
decision as to how you will "hold title" to the property. This decision has
legal, tax and estate planning ramifications. Therefore, it may be prudent to
consult an attorney or certified public accountant (CPA).
The following information is supplied for informational
purposes and should not be relied upon as legal definitions.
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Buying
Alone
- Sole Ownership
- A single individual who has not been legally married.
- An unmarried individual who was married and is now legally divorced.
- A married individual who wishes to acquire title in his or her name alone.
At the time of closing, the spouse of the buyer will be required to specifically
disclaim or relinquish his or her right, title and interest to the property.
- Living Trust
A living trust is created while an
individual is alive and gives the individual control of the distribution of his
or her estate. The individual transfers ownership of his or her property and
assets into the trust.
Buying with
Others
- Tenancy in Common
Enables each partner in the property
to sell, lease or will to his/her heirs that share of the property belonging to
him/her.
- Who can take title? Any number of individuals.
- Ownership Division: Any number of interests, equal or unequal.
- Who holds title? A separate legal title to his undivided interest is
held by each co-owner.
- Possession: Equal right of possession.
- Joint Tenancy
Property owned by multiple individuals
where if one of the owners dies, the remaining owners acquire the share of the
deceased owner automatically.
- Who can take title? Any number of individuals.
- Ownership Division: Interests cannot be divided.
- Who holds title? There is only one title to the whole property.
- Possession: Equal right of possession.
- Community Property
Property owned equally between a
husband and wife. Each must sign all agreements and documents of transfer.
- Who can take title? Only a husband and wife.
- Ownership Division: Interests are equal.
- Who holds title? Similar to title being in a partnership, title is held
in "community."
- Possession: Equal right of possession.
Additional Ways to Hold
Title
- Corporation
A corporation is a legal entity, created
under state law, consisting of one or more shareholders but regarded under law
as having essentially the same as those of an individual. The entity has
continuous existence until it is dissolved according to legal procedures. Land
owned by a corporation cannot be attached for personal debts or judgments
rendered against any of its shareholders.
- A Partnership
A partnership is an association of two or
more persons who can carry on business for profit. A partnership may hold title
to real property in the name of the partnership with partners having an equal or
an unequal interest in the property.
- A Trust
A trust is an arrangement whereby legal title to
property is transferred by the grantor (or trustor) to a person called a
trustee, to be held and managed by that person for the benefit of the people
specified in the trust agreement, called beneficiaries.
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