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How Do You Own Your Property?

Posted on 08 Jun 2011 by admin | Filled under: intellectual-property

When it comes to estate planning, it's essential for both you and your attorney to know how your property is titled. Knowing how you own your property has an effect on what estate planning methods you use – and whether or not your estate plan is even effective. Here are the basic categories of property ownership: Joint Ownership Joint ownership includes property that's held as Joint Tenants With Rights of Survivorship, and property that's held as Tenants in Common.

It's important to know the difference between these two types of joint property, because they're treated completely differently when it comes to estate planning and probate. Joint Tenants With Rights of Survivorship When you own property as Joint Tenants With Rights of Survivorship – a home, for instance, or a bank account – and you pass away, the entire property passes to the surviving owner outside of the probate process. This is great news if it's what you intend to have happen. But say you own a home with Jane as joint tenants, and you want the home to go to Sue when you pass away? If you don't understand how your property is titled, you might just write a will that says you want your home to go to Sue. This won't work, because your will has no effect on property that's titled as Joint Tenants With Rights of Survivorship. The will only controls the probate process, and the house passes outside of probate.

So, it's important that both you and your attorney know how your property is titled. Tenants In Common What if you and Jane own a home together as Tenants In Common? Then you each own an interest in the house, and when you pass away, your share of the house is treated like individual property. So, if you have a will, the will controls who gets your share of the house. If you have no will, then the state intestacy statute controls who gets your share of the house. Title By Contract Some types of property are owned by you, but you've given your beneficiaries a right to the property via contract. Examples include life insurance policies, payable on death accounts, annuities and retirement accounts. When you've designated a beneficiary to receive this type of property, then, upon your death, the property passes to your beneficiary outside of the probate property. Again, your will has no effect on this type of property.

So, especially if you're recently divorced, it's important to review your beneficiary designations in addition to changing your will, to make sure you don't inadvertently leave your ex-spouse an inheritance. Individual Ownership Property that's titled solely in your name, without a beneficiary designation, is your individual property. When you pass away, this property will be subject to probate and is controlled by your will, if you have one. In order to avoid probate, you may consider transferring your individual property into a Revocable Living Trust.