Protect Your Loved Ones - Understand How To Hold Title

Buying A Home

Protect Your Loved Ones

Understand How Holding Title To Your Home Affects Your Family

One of the last things most home buyers think about when buying a home is how to take title to their new house. It's best to consult a real estate attorney or your tax professional but, unfortunately, most home owners don't do that.

To help with this decision, here are the five most common ways to hold title to your home.

Sole Ownership 

• For single individuals or married persons who takes title in their name alone.

Tenants in Common

• Owners are any people at any time
• All personal shares are subject to probate
• Only descendents' share receives step-up in basis*
• Can be Willed to non-co-owner third party
• Co-owner may transfer personal share to third party during life

Joint Tenants

• Owners are people who purchase at the same time
• Passes to co-owners without probate
• Only descendents' share receives step-up in basis*
• Cannot be Willed to non co-owner third party
• Co-owner may transfer personal share to third party during life
• If co-owner transfers personal share to third party, ownership changes to tenants in common

Community Property

• Owners are spouses or domestic partners (DP) only
• Passes to spouce/DP without probate if left to spuse/DP
• Received full step-up in basis* on first death if left to spouce
• Maybe Willed to non-spouse/DP third party
• If Willed to third party, descendents' share gets step-up in basis*
• Required concent of both owners for transactions that affect title

 Community Property With Right of Survivorship

• Essentially combines the most desirable aspects of community property and joint tenancy for many couples
• Owners are spouses or domestic partners (DP) only
• Passes to spouses/DP without probate
• Cannot be Willed to non-spouse/DP third party
• Receives full step-up in basis* on first death
• Requires concent of both owners for transactions that affect title

*Step-Up In Basis: When a person dies, their real property is re-valued as of the date of death. A higher value can minimize or eliminate income tax due upon later sale of the property.

If you don't currently have a good estate planner and/or a tax professional, please let me know. I'll be happy to introduce you to one.

To Your Success ~

Maria Marriott / Mortgage Planning Advisor

Maria@MariaMarriott.com

www.MortgageMinutesAndMore.com

CLICK HERE for upcoming Home Buyer Classes

CaDRELicense#00654852

This blog contains general information and is not intended to be used as legal advice for your individual situation. How you choose to hold title to your real property may be affected by many factors not considered here. You should consult legal and tax professionals before deciding how to hold title to real property.