Ways to Hold Title to Your Home

Holding title is evidence that you own your home.  How you hold title is important because the various forms of ownership have different rights and obligations.  Some of the more common ways to hold title are outlined below.  Keep in mind that these are general descriptions and are not intended as legal definitions or advice.

Sole Ownership
This is the simplest form of ownership.  When you hold title in this manner, you alone own all interest in your real estate.  Sole owners are typically single.  However, sole ownership can also be an option for someone who is married. If you are married and want to take title in your name alone, your spouse is usually asked to give up any ownership claim by signing a document called a quit claim deed.

Joint Tenancy
In this form of ownership, two or more people hold title to property together.  Each person owns the property as a whole and has a right to equal use of that property during his/her lifetime.  All joint tenants must take title at the same time and through the same document.  Under joint tenancy with rights of survivorship, when a joint tenant dies, that person's interest in the property automatically transfers to the remaining living co-tenants rather than to heirs named in the decedent's will.

Tenancy by the Entirety
A few states in the United States have a special form of joint tenancy for homeowners who are husband and wife.   They hold title together, and neither spouse can take any action on their own that would create an ownership claim or lien on the property.   Upon the death of either spouse, the other gets full title to the property.

Tenancy in Common
Tenants in common are owners who can have either equal or unequal interests.  For instance, you may own 25 percent and your parents may own 75 percent.  Or you and your sister may each own 50 percent of a property.  Either way, each owner can use and enjoy the entire property.  Any one of the owners may sell his/her share, give it away, or will it to someone.  Sometimes this ability to transfer interests by any one tenant in common causes issues for the others.  A way to avoid this is to have a written agreement that specifies how transfers of property interest can occur.

Community Property
Nine U.S. states recognize community property laws, which apply to real estate owned by a husband and wife.  Each spouse has one-half interest in the property, as well as the right to will that interest to a spouse or to someone else.   For example, a person may want to pass his/her share of the property to a child.  If the ownership is community property with rights of survivorship, however, then the deceased spouse's interest terminates when he/she dies, and the surviving spouse owns the entire property.  The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.  Each state has its own laws that identify what qualifies as community property.  Generally speaking, however, property that is acquired during the marriage is typically considered community property.

It is obvious that the way you hold title has important legal implications.  Therefore consult an attorney to get full details and a clear understanding of your current and future rights for each method.  That way you will be able to make an informed choice on which ownership type is most appropriate for your situation.

Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.