The American dream used to consist of a modest house with a white picket fence and 2.5 children playing in the front lawn. While today’s modern view of this vision has changed, the process of owning real estate is as beneficial as ever. Here in the Bethesda area, couples everywhere are looking to set out on their own and invest in a real estate property in order to build a home for having kids, make extra income off of monthly rents from tenants, and so on. Real property is a valuable asset for any American, serving as a an appreciating asset that can give your holdings a major boost. One aspect that many young couples do not consider when shopping for a house is estate planning. This process serves to help individuals anticipate and prepare for a variety of life events in order to make the most of their estates in addition to organizing how to take care of it after death.
JDKatz is proud to be your team of quality estate lawyers in Maryland, offering a comprehensive set of services to provide the best outcome for your estate and your loved ones. Our experienced estate planning attorneys have the knowledge needed to create a personalized plan for you and your estate. We can help you navigate the complex field of estate, law, delivering guidance that will optimize your wealth and resources. Today, we’ll look into the different types of real property ownership and the long-term effects of each choice when you or your spouse passes away. When done, be sure to speak to our expert team for help with trusts and estates, wills and probate, elder law, and more to see how we can help!
Concurrent Ownership Interest
Each state provides different methods of acquiring jointly owned real estate with your spouse. When you invest in real property with another individual, you are simultaneously taking ownership with a vested interest in the purchase. Each co-owner holds their own part of the property and has a say in how it is handled. While joint ownership covers the basis that you are jointly sharing in the ownership of a parcel of land, the type of ownership that you purchase in the property with will have an impact on how things are done if one owner passes away.
Tenancy in Common
This approach lays the framework for two or more individuals who have an undivided interest in the property with one another. Each person holds their own share in the property, which unless specifically stated, is equal to the other shares held. Tenancy in common means that each holder is free to do what they wish with their share of the property. A tenant may choose to sell his or her share to a third party while alive, or utilize a revocable living trust to designate the succession of any holdings. While this approach is convenient for business partners, it often is not practical for married couples.
Joint tenants can benefit from this approach, which is similar to tenants in common except for one major difference — Right of Survivorship. This term lays the groundwork for succession of property upon death, where the deceased tenant’s holdings will be divided equally up among the remaining individuals. This process continues over time until only one tenant is remaining. Once this happens, the remaining individual will gain an undivided ownership interest in the property in question, affording him or her with all of the rights of sole ownership. Other individuals may not be included unless everyone involved agrees to sign a new deed.
Married couples have been known to benefit from this approach, as the surviving spouse will gain full control of the property as the last surviving member of the trust.
Tenants by the Entirety
Those who like the idea of a Right of Survivorship can benefit from purchasing a property as tenants by the Entirety. This style is very similar to Joint Tenancy, except for a few key factors:
- The tenants listed on the deed must be married.
- Neither spouse can give up their ownership without the consent of the other spouse.
- The ownership of one spouse’s holdings cannot be affected by the other spouse’s creditors.
This tenancy can prove to be very convenient for the surviving spouse. All that will be needed to grant succession and full control is a short-form death certificate. Spouses cannot break this agreement except in cases where one spouse dies, both individuals are divorced, or by a mutually approved agreement.
Choosing your tenancy with your loving spouse will have far-reaching consequences down the road. Picking an ownership style that fits both of your lifestyles will prove to be very beneficial, saving a lot of time, stress, and money in the future. It’s important to clearly designate which type of ownership you wish to seek, especially since the courts may decide in a style that is your last choice.
Taking a title to real property is one part of an overall estate plan that can help to organize your holdings and dictate the distribution of your assets upon death. JDKatz is here to help, providing the best estate lawyers in Maryland to help our clients put a productive plan into place for the future. If you are about to buy a home with your significant other, or you are worried about the future of your estate, be sure to contact our professional estate planning attorneys today for assistance.