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What does it mean to take title?

by | Feb 26, 2018 | Blog

When you are purchasing a property, your escrow officer may ask how you want to take title. As “take title” isn’t a phrase most of us use on a daily basis, it can be confusing. And the truth is, it’s really important. In fact, how you choose to take title can lead to unforeseen legal consequences. Here’s a closer look at some of the ways title can be taken.

 

Tenancy in Common

Tenancy in common is when two or more owners share ownership of a property by equal or unequal percentages specified in the deed. Under tenancy in common, co-owners of the property may transfer their interest to another person. Should a co-owner die, their interest in the property is transferred to their beneficiaries. At the same time, the other co-owners maintain their percentage of ownership. According to, “Overview of the Ways to Hold Title to Property,” www.wilsonlawgroup.com, transferring property after a co-tenant dies requires a probate proceeding.

 

Joint Tenancy

Under joint tenancy, two or more owners own equal shares of the property, and when a co-owner dies, their share of the property transfers to the other joint tenants. Sometimes called joint tenants with rights of survivorship, this method of taking title is appropriate for people who want their portion of the property to transfer to their co-owners upon their death. No probate proceeding is required, but there are forms that must be filed and a new deed must be recorded.

 

Community Property

When married people purchase property, they generally take title as community property, unless they specify otherwise. A married person who wants to solely own the property may choose to own the property sole and separate to bypass this, as detailed on www.jaburgwilk.com, “How do I ‘Take Title’ When Acquiring Real Estate?” Laws around community property vary between states, and should be examined closely depending on the buyers’ needs. The outcome could affect the ability of a spouse to preserve their rights of ownership.

 

Living Trusts

Even for sole owners, it’s important to think about how they want to take title. Everyone has the capability to hold title through what’s known as a living trust, according to the Wilson Law Group article. A living trust can help avoid probate when the property owner dies, as the property transfers to designated beneficiaries who are to receive the property.

 

Consider Carefully How You Take Title

How you take title is a decision you should not take lightly. It can affect everything from taxes to ownership after your death. Of course, laws vary from state to state, and when the stakes are so high, you may want to consult a real estate lawyer before making a decision about how you want to take title to protect your rights and the rights of those you care about.

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