Monday, January 31, 2011

What Is Community Property?


A form of ownership by husband and wife during their marriage whereby each owns a
50% undivided interest in the entire property. Community property is recognized in Arizona,
California, Idaho Louisiana, Nevada, New Mexico Texas, Washington and Wisconsin.
Community property is distinguished from separate property, which is property acquired
before marriage, by separate gift or bequest, after legal separation, or which is agreed in
writing to be owned by one spouse.

Sunday, January 30, 2011

What Is Joint Tenancy?



An undivided interest in property, taken by two or more joint tenants. The interest must
be equal, accruing under the same conveyance, and beginning at the same time. Upon the
death of a joint tenant, the interest passes to the surviving joint tenants rather than the heirs
of the deceased.

Saturday, January 29, 2011

What Is Sole Ownership?


Exclusive ownership. An ownership so complete that no other person has any interest in the property.

Friday, January 28, 2011

What Types Of Property Ownership Are There?



As a property or homeowner, your deed defines the form of ownership and how the title for the property changes upon the death of an owner. The most common types of ownership are: sole ownership; joint tenancy; community property (with or without right of survivorship); tenancy in common; and tenancy by the entirety.

Thursday, January 27, 2011

Frequently Asked Question



1. What is the difference between a quitclaim and a warranty deed?

A quitclaim deed conveys only whatever interest the grantor has in the property, without
making warranties about rights that other people may have in the property. It is usually used
when granting land between two people that are well acquainted, such as between divorcing
spouses or family members. In contrast, a warranty deed conveys title to a grantee with a
guarantee of good clear title to the property free from any interests held by other people.

Wednesday, January 26, 2011

Subject To Clause


Many legal descriptions on deeds will also contain important exceptions and reservations. These exceptions and reservations usually follow the legal description and are usually contained in a clause that starts with the words "subject to". Common exceptions include mortgage liens, taxes, restrictions and easements. An example of the subject to clause would be "… subject to all easements and restrictions of record." Since the items in the subject to clause were excluded on your vesting deed, you will want to be sure to circle that clause so it will be excluded from your new deed also.

Tuesday, January 25, 2011

Together With Clause


Many deeds will contain a legal description like the samples above and then will be followed with a clause that starts with the words "together with" and includes additional items such as water rights, mineral rights, easements, rights of way, or even an additional tract of land. If you want the items listed in the "together with" clause on your new deed (and you probably will most of the time), you should circle that clause also.

Monday, January 24, 2011

Introductory Clause



The legal description is usually prefaced with introductory language such as "the following described parcel of land" or "the following tract of land to wit" or similar language. The We The People deed forms already contain the introductory language, so you do not need to circle the introductory language on the vesting deed. You can ask your We The People store representative to see a copy of a sample deed form.

Sunday, January 23, 2011

Sample Legal Descriptions





The following list provides samples of the most common methods used to describe real estate.
Most legal descriptions use one of these methods or a combination.


1. Lot and/or Block within an Existing Subdivision - When a parcel of land lies within an
existing platted subdivision, the legal description is usually short and straightforward because
the dimensions bounding the parcel should be presented on the subdivision plat. This is often
the case in developed areas, such as within cities or towns.

2. Township and Range System - This method of describing real estate is based on dividing
up land into different sections. A parcel is generally identified by its section, township, and
range.

3. Metes and Bounds - The metes and bounds method begins at a starting point and then
methodically plots the boundary for the real estate using directional and distance instructions.

Saturday, January 22, 2011

Vesting Deed


Fortunately, if you own real estate that you want to transfer, you already have the legal description written on (or attached to) the deed by which you obtained title to the real estate. This deed is known as the "vesting deed" because it is the deed that actually transferred title to you.

When you prepare your deed with the assistance of We The People, you will make a copy of your vesting deed and circle the legal description that you want typed on the new deed.

The vesting deed is usually one of the following types of deeds:
• Quitclaim Deed
• Special Warranty Deed
• Warranty Deed
• Grant Deed
• Grant, Bargain and Sale Deed
• Fee Simple Deed
• Interspousal Transfer Deed
• Executor's Deed
• Personal Representative's Deed
• Beneficiary Deed (after all grantors have died)
• Transfer on Death Deed (after all grantors have died).

The legal description that is available from your county's property tax assessor's office is usually only an abbreviated version of the actual legal description from your vesting deed and should generally be avoided. Those legal descriptions also commonly contain mistakes that can significantly alter the property being described.

A legal description will also be found on a deed of trust, deed of reconveyance, affidavit of death, or similar document. While those documents may have the correct legal description for your real estate, it is possible that it differs (either slightly or greatly) from the legal description on your actual vesting deed. Those documents are not the vesting deeds and were not used to actually transfer title to the real estate to you. It is safest to stick to the legal description on your actual vesting deed.

If you do not have a copy of your vesting deed, you can usually obtain it from your county recorder's office. Some counties make copies of deeds available online, while others still require you to get them in person. The nominal cost charged by the county recorder's office is well worth the peace deed. The We The People store staff or a title company may also be able to help you obtain the of mind knowing that you are using the legal description from the actual vesting vesting deed.

Friday, January 21, 2011

Legal Descriptions 101


A critical element of any deed is the legal description. In order to effectively transfer title to real estate, you must adequately describe the real estate that is being transferred. The primary purpose of a legal description is to describe a particular parcel of land in a way that uniquely describesonly the subject parcel of property, without ambiguity. While legal descriptions can be complex, the next few posts will discuss some of the basics to help you prepare your new deed.

Thursday, January 20, 2011

Other entities: corporation, limited liability company (LLC), partnership, etc.

 

It is also possible for other entities such as a corporation, LLC or partnership to own real estate. In such event, the full name of the entity is listed as the new owner of the real estate.

Wednesday, January 19, 2011

Entity Ownership



Living trust

When many people set up a living trust, they then transfer their property into the living trust. They do this by naming the living trust as the new owner of the real estate. A major advantage of holding title to real estate in a revocable living trust is to avoid probate costs and delays. If you are interested in learning more about the Living Trust products We The People can prepare, ask for the Guide to Revocable Living Trusts.

Tuesday, January 18, 2011

Types Of Co-Ownership


No designation

It is possible that the new owners only want to take title in their joint names and do not want to list any of the above designations. Be aware that the law varies from state to state with regards to how the title to the real estate will be held when there is no designation on the deed (tenancy in common, joint tenancy, tenants by the entirety, community property or community property with right of survivorship). It is usually preferable to list the designation on the deed itself so you can know how the title is held.

 

Monday, January 17, 2011

Types Of Co-Ownership


Husband and Wife

This designation is commonly used by married couples acquiring title together. It is often used in conjunction with one of the other co-ownership designations. For designations reserved exclusively for married couples (tenancy by the entirety, community property and community property with right of survivorship), it lets everyone know that the new owners are in fact married. If the designation is used alone without any other designation, the law varies from state to state with regards to how the title to the real estate is held(tenancy in common, joint tenancy, tenancy by the entirety, community property or community property with right of survivorship).

Sunday, January 16, 2011

Types Of Co-Ownership


Community property with right of survivorship.

Community property with right of survivorship is a form of vesting title to property owned by husband and wife during their marriage which they intend to own together. This form of holding title shares many of the characteristics of community property but adds the benefit of the right of survivorship similar to title held in joint tenancy. Married persons who own real estate in California, Nevada, Louisiana, Wisconsin, Texas, Arizona, Washington, Idaho and New Mexico can take title as community property with right of survivorship.

Each spouse owns a 50% interest in the real estate, and the interest automatically passes
to the surviving spouse upon death of one of the co-owners. In some states, and Affidavit of Death (or similar document) is filed with the recorder's office to show that a spouse has died and that the surviving spouse now owns the property. In other states, a certified copy of the death certificate is taken to the recorder's office.

A major tax advantage for community property with right of survivorship is a new
stepped-up basis to market value on the date of death for 100% of the property's market value. With other forms of ownership, only the deceased spouse's share receives the step up in basis.

Saturday, January 15, 2011

Types Of Co-Ownership

Community Property

Community property is a form of vesting title to property owned by husband and wife during their marriage which they intend to own together. Married persons who own real estate in California, Nevada, Louisiana, Wisconsin, Texas, Arizona, Washington, Idaho and New Mexico can take title as community property.

Community property is distinguished from separate property, which is property acquired before marriage, by separate gift or bequest, after legal separation, or which is agreed in writing to be owned by one spouse.

Since all community property is owned equally, husband and wife must sign all
agreements and documents transferring the property or using it as security for a loan.

Under community property, each spouse has the right to dispose of one half of the community property by Last Will and Testament.

A major tax advantage for community property assets willed to a surviving spouse is a new stepped-up basis to market value on the date of death for 100% of the property's market value. With other forms of ownership, only the deceased spouse's share receives the step up in basis.


NOTE: Community property is not recognized in all states and is only available as a choice on the workbooks for California, Idaho and Nevada.

Friday, January 14, 2011

Types Of Co-Ownership

Tenancy by the entirety. Tenancy by the entirety is a form of vesting property available to married couples in a limited number of states. With tenancy by the entirety, each spouse owns an equal interest in the real estate.

One characteristic of tenancy by the entirety is the "right of survivorship." When one
spouse dies, the surviving spouse automatically receives title to the real estate without
probate costs and delays. In some states, an Affidavit of Surviving Spouse (or similar
document) is filed with the recorder's office to show that a spouse has died and that the surviving spouse now owns the real estate. In other states, a certified copy of the death
certificate is taken to the recorder's office.

Another characteristic of tenancy by the entirety is the right of possession. Each tenant
has an equal right to possess the whole property and cannot be evicted from the real
estate by the other tenant.

Additionally, with tenancy by the entirety ownership, one spouse cannot convey his or
her share of the real estate without the other spouse's signature. However, if the married
couple later divorces, the form of ownership automatically changes to tenancy in
common.

Because tenancy by the entirety ownership includes the right of survivorship, real estate held in tenancy by the entirety is not subject to disposition by a spouse's Last Will and
Testament. The deceased spouse's Last Will and Testament has no effect on the tenancyby the entirety real estate when the other spouse survives.

NOTE: Tenancy by the entireties is not recognized in all states and is only available as a
choice on the workbooks for Michigan, Missouri, New Jersey and Pennsylvania.

Thursday, January 13, 2011

Types Of Co-Ownership


Tenancy in common.

Tenancy in common is a form of vesting title to property owned
by two or more individuals in undivided fractional interests. These fractional interests
may be in equal or unequal amounts. Each tenant in common owns a share of the real
estate, is entitled to a comparable portion of the income from the property and must bear an equivalent share of expenses. Each co-tenant may sell, lease, or give away in a will or living trust his or her share of the property.

A characteristic of tenancy in common is that each owner can own a specific, unequal
share. For example, one co-owner might own a 25% interest and the other co-owner
might own a 75% interest.

Another characteristic of tenancy in common is the right of possession. Each co-tenant
has an equal right to possess the whole property and cannot be evicted from the real
estate by the other co-tenant(s).

Any tenant in common is free to sell, convey or mortgage the tenant's own interest as he
or she sees fit, and the new owner becomes a tenant in common with the others.


As there is no right of survivorship with tenancy in common, when one tenant in common dies, the interest passes according to the terms of that tenant's Last Will and Testament (or through the state's "intestacy" laws if there is no will). However, the deceased tenant's interest in the real estate will be subject to probate court costs and delays.

Wednesday, January 12, 2011

Types Of Co-Ownership



Joint tenancy

Joint tenancy is a form of vesting title to real estate owned by two or more persons. The new owners may or may not be married. With joint tenancy, each joint tenant owns an equal interest in the real estate. Generally, title to the real estate must have been acquired by all joint tenants at the same time, by the same conveyance, and the document must expressly declare the intention to create joint tenancy.

One characteristic of holding title in joint tenancy is the "right of survivorship." When one joint tenant dies, the surviving joint tenant(s) automatically receive(s) title to the real estate without probate costs and delays. In some states, an Affidavit of Surviving Joint Tenant (or similar document) is filed with the recorder's office to show that a joint tenant has died and that the surviving joint tenant(s) now own(s) the real estate. In other states, a certified copy of the death certificate is taken to the recorder's office.

Because joint tenancy ownership includes the right of survivorship, real estate held in joint tenancy is not subject to disposition by a joint tenant's Last Will and Testament.

The deceased joint tenant's Last Will and Testament has no effect on the joint tenancy property when there is at least one surviving joint tenant. If you want someone other than the other joint tenant(s) to get your interest in the real estate after your death, you should consider a different option for holding title.

Another characteristic of holding title in joint tenancy is the right of possession. Each joint tenant has an equal right to possess the whole property and cannot be evicted from the real estate by the other joint tenant(s).

With joint tenancy, one joint tenant can transfer his or her interest in the real estate without the other joint tenant's approval. Such a transfer will end the joint tenancy and create a tenancy in common. This could result in unintended consequences because the remaining joint tenant now owns the real estate with someone who could be a total stranger. Also, the remaining joint tenant may now need to revise his or her will or living trust to specify who gets the interest in the real estate after death.

Tuesday, January 11, 2011

Co-Ownership



Co-ownership or concurrent ownership means simultaneous ownership of a given piece of real estate by two or more persons. Some of the designations are available only to married persons (tenancy by the entirety, community property and community property with right of survivorship) while others are available regardless of the marital status of the new owners (joint tenancy and tenancy in common). The type of co-ownership available varies from state to state, but the most common forms of co-ownership are to follow.

Monday, January 10, 2011

Types Of Sole Ownership

No Designation

It is possible that the new owner only wants to take title in his or her name alone and does not want to list any of the above designations. This may be perfectly fine in states where the spouse of the new owner does not receive rights to the real estate under state law. However, you should be cautious if you are not listing your marital status if you live in a community property state or another state where the spouse of the new owner may receive benefits under state law.

Sunday, January 9, 2011

Types Of Sole Ownership

 
Sole and Separate Property
This designation is common in community property states such as California to make clear the intention that the real estate should be granted to one spouse as that spouse's sole and separate property. Often, it is a good idea (and usually required by a title company insuring title) to have the spouse of the new owner to sign the deed (or sign a new deed) specifically disclaiming his or her right to the property.

Saturday, January 8, 2011

Types Of Sole Ownership

This designation may be used by a man or woman who is currently married. It is commonly used with the next designation "sole and separate property." It lets everyone know that the new owner is married and that the spouse may have rights to the real estate under state law (unless the new owner includes the designation "sole and separate property" and the spouse signs off disclaiming his or her right to the property).

A married man/woman.

Friday, January 7, 2011

Types Of Sole Ownership


A widower/widow. This designation may be used by a man or woman who is not currently married, but was previously married and his or her spouse is now deceased. It is also similar to the prior two designations in that it also lets everyone know that the new owner is not married, so there are no claims to the property from a spouse.

Thursday, January 6, 2011

Types Of Sole Ownership


An unmarried man/woman. This designation may be used by a man or woman who was previously married and is now legally divorced. It is similar to the "single man/woman" designation in that it also lets everyone know that the new owner is not married, so there are no claims to the property from a spouse.

Wednesday, January 5, 2011

Types Of Sole Ownership


A single man/woman. This designation may be used by a man or woman who has never been legally married. It lets everyone know that the new owner is not married, so there are no claims to the property from a spouse.

Tuesday, January 4, 2011

Sole Ownership By An Individual


Sole ownership by an individual is generally available to a single person or a married person who takes title in his or her name alone. Being the sole owner, one person alone enjoys the benefits of the property and is subject to the accompanying burdens, such as the payment of taxes. A sole owner is generally free to dispose of real estate at will, and normally only a sole owner's signature is required on the deed.

If the sole owner is married, the spouse is often asked to sign the deed or a separate quitclaim deed that gives up any ownership claim the spouse may have under state law. In some states, like Minnesota, the spouse is required to sign the deed.

Potential disadvantages for sole ownership include the likely result that the real estate will have to go through the probate process after the owner dies. Additionally, married couples could have some tax advantages when one owner dies if they held the title jointly in some form of community property.


 

Monday, January 3, 2011

Understanding Common Ways Of Holding Title




When taking title to real estate, the form of ownership taken - or in other words, the vesting of title - will determine who owns the real estate, who may sign various documents involving the real estate and the future rights of the parties to the transaction. These rights involve such matters as real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor's claims. Also, how title is vested can have significant probate implications in the event of death.

You should give careful consideration to the manner in which title will be held. You are encouraged to seek your legal or tax professional's advice if you are unsure how you want to hold title.

Sunday, January 2, 2011

Beneficiary/Transfer on Death Deed




A Beneficiary/Transfer on Death Deed is a special type of deed that allows the owner of an interest in real estate to transfer the owner's interest to one or more grantees, and the transfer becomes effective upon the death of the owner. This type of deed is sometimes referred to as a Beneficiary Deed in some states or a Transfer on Death Deed in other states. Such a deed is subject to liens on the property in existence on the date of the death of the owner.

One of the nice features of this type of deed is that while the grantor is alive and well, he or she can revoke the Beneficiary/Transfer on Death Deed or can change the beneficiaries named on the deed. Transfer of real estate with this type of deed helps to avoid probate of the underlying real estate.

Upon the death of the last grantor of a beneficiary deed, the beneficiaries named on the deed become the new owners of the real estate.

Saturday, January 1, 2011

Life Estate Deed




A Life Estate Deed is a special type of deed that allows the owner of real estate to transfer the real estate to one person (known as the "life tenant") for duration of a specified individual's lifetime (usually the life tenant's lifetime), and then to someone else (known as the "remaindermen") after the death of the specified individual. The life tenant is said to hold a life estate, while the remaindermen are said to hold the remainder interest. It is common for the current owner of the real estate to be named as the life tenant, but it is not required.

When considering preparing a Life Estate Deed, you should be aware that it is irrevocable once it has been executed. The Beneficiary/Transfer on Death Deed, on the other hand is revocable while the current owner is alive.


Please note that the Life Estate Deed is currently not available in Minnesota.