How do your clients want to be vested?

Vesting is how your client will hold title to real property.  It is a good idea to have an understanding of the different methods of vesting so you can speak intelligently to your clients about this important aspect of home ownership.  As always you want to manage your risk level, so be sure to direct your clients to a real estate attorney, tax professional or your title and escrow company if there are complicated questions about vesting. 

Here are some basics...

HOLDING TITLE

The person(s) who are shown by the public record to own real property are called the "vested" owner(s).  The vested interest in real property for owners is called the "fee estate" or "fee title."  When title has more than one vested owner, there are four ways in which parties can hold an ownership interest in real property.  Below are the methods with a brief explanation of what they mean:

Tenants by the Entirety:

This vesting is used for married couples only.  If  parties hold title in this manner they hold with rights of survivorship.  If one party dies, title automatically passes to the other upon the recording of a death certificate. 

Tenants in Common:

Holding title in this manner creates separate interests.  Each party holds their interest individually and should a party die, the interest passes to that party's heirs or beneficiaries, not to the remaining title holders.  A "Tenants in Common" interest can be held as a specific percentage of ownership from 1% to 99%.  

Not as Tenants in Common, but with Rights of Survivorship:

Using this terminology creates survivorship rights for unmarried parties.  This is often used when two or more people purchase real estate together and wish their interest to pass to the survivor(s) upon their death. 

Estate in Fee Simple:

This is used when an individual is in title alone.  It means that they own the "fee" estate in the real property.  In other words, this terminology says that they have the entire ownership interest in this parcel of real property.

When purchasing property it is important that you direct documents to be prepared to meet your needs.  Please inquire about vesting for business entities should you need assistance with that information. 

For more information on Property Ownership, Transfers of Real Property, and Taxes visit this informative chapter from the Oregon State Bar.

If you are working with a buyer or seller you should always verify how the property is currently vested.  You can easily do this by ordering a list pack or a trio from us.  This will include the last recorded deed, showing you the current vesting / ownership of the property.  Click here for Mid-Willamette Valley Customer Service

Thanks for reading! 

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Note:  Types of ownership can very from state to state.  The information provided here is for Oregon.