How Should You Hold Title On Your House?


This post is in: International, Real Estate
One Comment

5-7-1It sounds like a trick question with an obvious answer, but the truth is there are lots of ways you can hold title to your home. It all depends on your unique circumstances and what you are trying to accomplish.

Here are some of your options:

Sole and Separate. If you’re married, but only one of you wants to hold title to a property, you can title it as someone’s Sole and Separate property. In a community property state you’ve got to do this carefully, as the law automatically confers 50-50 ownership to both spouses.

Joint Tenants with Right of Survivorship. This is just like it sounds. You are each equal owners of the home, and when one spouse dies, title transfers to the other spouse automatically. You each have full right of possession of the property. Note that if your Will or Trust sets things up differently you could have a problem. Typically, what’s on the Deed wins in these battles.

Tenants-in-Common. You each have possession of the property, but your shares may be different. Plus, your ownership is limited to your share. That means you could sell your share in the home to someone else, despite any objections raised by your spouse.

5-7-2Community Property. The property is held jointly during your lifetime, but upon a spouse’s death, his or her interest transfers to his or her heirs, not necessarily the other spouse.

Community Property with Right of Survivorship. The property is held jointly during your lifetime, and upon death, a spouse’s share passes to the other spouse, and not to his or her heirs.

In a Trust. If the property is held in a trust, title passes to the beneficiaries, without the property going through probate. Typically your home is held in a revocable type of trust, so you can make changes during your lifetime, including selling the home. Don’t get involved with irrevocable trusts without specific legal advice. And don’t get involved in Offshore or Foreign trusts at all. Those are absolute IRS red flags these days.

In an Entity. There’s a neat way that you can hold your property in a legally protected entity, yet still retain the tax advantages of holding the home in your own name.

We’ll be talking about all these title methods, and the pros and cons of each this method in our May Coaching classes. You can learn more about Coaching and sign up here.



Leave a Comment