How do you and your spouse want to hold title? This is a question that many couples face when purchasing a home together. The way you and your spouse choose to hold title can have significant implications for your financial and legal rights, so it’s important to carefully consider your options.
When deciding how to hold title, you have several choices. The most common options are joint tenancy with right of survivorship (JTWROS), tenancy in common (TIC), and tenancy by the entirety (also known as community property in some states). Each of these options has its own set of benefits and drawbacks, and it’s essential to understand them before making a decision.
Joint Tenancy with Right of Survivorship (JTWROS)
JTWROS is the most common form of title ownership for married couples. With this arrangement, each spouse owns an equal share of the property, and if one spouse dies, the other automatically inherits the deceased spouse’s share. This can provide peace of mind, as there is no need for probate or legal proceedings to transfer the property. However, JTWROS may not be the best choice if you want to ensure that your children or other beneficiaries receive your share of the property upon your death.
Tenancy in Common (TIC)
TIC is another option for couples who want to hold title together. With TIC, each spouse owns a separate, distinct share of the property, and the shares can be inherited separately. This can be beneficial if you want to ensure that your children or other beneficiaries receive your share of the property upon your death. However, TIC does not offer the automatic transfer of property upon the death of one spouse, which means that probate or legal proceedings may be necessary.
Tenancy by the Entirety (Community Property)
Tenancy by the entirety is available only to married couples and is similar to JTWROS in that the property is owned equally by both spouses. However, this form of title also offers protection against creditors, as neither spouse can sell or transfer their share of the property without the consent of the other. In some states, such as California and Texas, married couples automatically hold title as community property, which means that all property acquired during the marriage is considered jointly owned.
Considerations for Your Decision
When deciding how to hold title, consider the following factors:
– Your individual financial situations and goals
– Your estate planning needs
– The potential for future remarriage or children
– The possibility of divorce or separation
It’s also a good idea to consult with a real estate attorney or financial advisor to ensure that your decision aligns with your overall objectives and complies with state laws.
In conclusion, how you and your spouse choose to hold title to your property is a significant decision that can have long-lasting implications. By carefully considering your options and consulting with professionals, you can make the best choice for your unique circumstances.
