There are many ways to hold title to real property. Each form has its own advantages and disadvantages. And each has its own implications on ownership, transfer, financing and taxing. Here are the most common ways to hold title:
- Sole Ownership: Sole ownership is held by a single man or woman who is not married, or by a married person who owns real estate separate and apart from their spouse.
- Unmarried Man/Woman: Ownership held by a divorced person who is now single.
- A Married Man/Woman, As His/Her Sole and Separate Property: Ownership when a married person holds title in their name without a spouse. This results in the spouse relinquishing all rights, title and interest in the property.
- Community Property: Community property, a form of co-ownership by spouses, gives equal ownership to each spouse. It also allows an equal split of real estate property in the event of divorce. These states have community property laws: Arizona, California, Idaho, Louisiana, New Mexico, Texas, Washington, and Wisconsin.
- Joint Tenancy: When two or more people, usually spouses, hold equal rights to a property during their lives. If one tenant passes on, the rights of their ownerships pass to the surviving tenant without probate or a will.
- Tenancy in Common: Under tenancy in common, there is no right of survivorship. The co-owners own undivided interests; unlike joint tenancy, these interests don’t have to be equal in quantity or duration. Each tenant owns an interest which, on his or her death, vests in his or her heirs or beneficiaries.
- Trust: Title to real property may be held by one person for the benefit of another. The trustee can be an individual, entity or both, and holds title for the beneficiary, who retains all of the management rights and responsibilities, pursuant to the terms of the trust.
- Community Property with Right of Survivorship: Community property with the right of survivorship allows married couples to transfer community property assets to the survivor, upon the death of one of the spouses, without will or probate. It includes benefits of both joint tenancy and community property.
In addition to people, entities are also capable of holding title. Some of these entities include:
- General partnership
- Limited partnership
- Limited liability company
- Corporations (including non-profit corporations)
In Texas, title companies are the best source of information on the ways to hold title. For a referral to a title company in the North Texas area, reach out to me and I'll provide some of my favorites.
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