Taking Title to an Estate
August 27, 2020
There are many different ways to take title to an estate. One way is called severalty, which is where you buy a property all by yourself. This is ownership by one person or one company. Think of the first five letters of the word sever, which means to cut off. So, when you cut everyone else off and buy by yourself, you own the property in severalty. Where multiple people get together and purchase property, there are many ways to take title as well. One way to take title with multiple owners is called tenancy in common. Let's say we have three people who want to buy a rental house together and they take title under tenancy in common. The biggest factor is that if one of the parties dies, the interest will go to their heirs. Think of tenancy in common with an acronym, TC meaning to the children. Children are typically heirs. So, in tenancy in common, when one of the owners dies, the heirs will inherit the rights.
Joint tenancy is a different way for multiple owners to take title. If three people once again where to buy a rental property and take title as joint tenancy, then there must be four unities to have this created. The four unities are: time, title, interest and possession. Time- they must take title at the same time. Title- they are all joint tenants on one deed. Interest- the ownership interest must be equal. Possession - they all share the property equally and they all have access to the property. TTIP or T-TIP is our acronym. The biggest characteristic of joint tenancy is that if one of the parties dies, the interest will go to the surviving owners, not the heirs. A third way is tenancy by the entireties, which simply means the parties must be married. It is very similar to joint tenancy, but it simply means you must be married when you acquire property. And finally, many states allow what is called community property. We separate that between separate property versus community property. Separate property is property acquired before marriage, whereas community property is property acquired during your marriage.
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