What Are The Different Ways to Title Property?
Property can be titled in several different ways. The five most common ways are:
1. Fee Simple – ownership exists when there is only one title owner. If you own property that is titled solely in your name you possess total legal control over it. This allows you to do with it whatever you want without anyone else’s permission. You are free to retain, sell or give the property away whenever desired. You also may say who will receive the property after your death. Finally, since only your individual legal rights are involved, any creditor of yours can make a claim against any of your fee simple property to satisfy a debt.
2. Tenancy in Common – ownership exists when two or more title owners hold the property together as tenants in common. If you own tenancy in common property, you share legal control of it with others.
3. Joint Tenancy – ownership is like tenancy in common in that two or more joint tenants own the property together and each owner has the right to enjoy its entire use. If you are a joint tenant, you have the right, while alive, to keep, sell or gift your joint tenant’s interest in the property to others.
4. Tenancy by the Entirety – ownership is a way married couples in some separate property states can title their primary residence to provide creditor protection for a surviving spouse. Following the death of the first spouse, the home titled as tenancy by the entirety automatically passes to the surviving spouse free of probate. This form of ownership may be a good choice of title if either spouse might someday be subject to business or professional liability since the property is protected from creditor claims.
5. Community Property – ownership is a way married couples in community property states can title their property to reflect that they each own half of the property. Owning property as community property can help couples escape unnecessary capital gains taxes.