How You Own Property May Affect Your Estate Planning
You sit down to construct your estate plan, or perhaps update an existing plan, and find that property is a significant asset. How you own that property--how you hold title--can influence the distribution of your estate. Primary ways to hold title on property and their effects on estate planning are:
- Fee simple, also called outright ownership, means you own the property by yourself and can sell it or give it away without anyone's consent. You may also leave the property to any beneficiaries you choose, so long as you recognize a spouse's marital interest.
- Tenancy in common is when two or more people have ownership. You can sell or donate your share as you wish, without the permission of other owners. Upon your death, your share of the property will go to your heirs or the beneficiaries in your will.
- Joint tenancy with rights of survivorship means that two or more people own equal shares of the property. When an owner dies, his or her share passes to the surviving owner(s) even if there is a will that says the property should go to someone else.
- Tenancy by the entirety is a form of joint property ownership that only applies to married couples. Neither spouse can sell property owned this way without the permission of the other. When one spouse dies, full title goes to the survivor.
- Community property laws apply to married people in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The laws do vary, but generally hold that each spouse has a 50 percent interest in all property and at death can dispose of that interest as desired.
It's important to note that other factors not listed here may come into play when transferring property. Professional advice is recommended.
Please call Monica Estabrooke at 800-892-2757,ext 421, or e-mail us at monica.estabrooke@uwa.unitedway.org, for more information.
The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.
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