Holding title represents legal ownership of a property and is documented on a deed recorded with the local county government. When purchasing property, it pays to consider how you will hold title. Since every circumstance is different, it may necessitate a different strategy. Below, I have listed common ways to hold title.
Sole Ownership – Ownership by an individual person or an individual entity.
• A Single Person – the property is purchased by one person who is not married or not in a domestic partnership. “John Doe, an unmarried person.”
• A Married Person or Registered Domestic Partner as a Separate Estate – the property is purchased by a married person but will be owned separately from their spouse or partner. “John Doe, a married man as his separate estate.”
Buying a property alone through sole ownership gives you complete control of the property, and upon your passing, the property is distributed according to your will.
Co-Ownership – Ownership by two or more persons or entities.
• Community Property – in Washington, property conveyed to a married person or someone in a domestic partnership is legally presumed to be community property unless acquired in another way. The property is owned equally by the spouses. Upon the passing of a spouse, the deceased’s share of the property can be transferred by will, or if there is no will, it goes to the surviving spouse. “John Doe and Jane Doe, husband and wife.”
• Tenancy in Common – this is when two or more persons or entities own fractional ownership interests in a property. These shares can be unequal. If one owner passes, their share does not automatically transfer to the other owners—it goes to their heirs or through probate. “John Doe, a single person as to a 30% interest, and Billy Bob, a single person as to a 70% interest.”
Joint Tenancy with Right of Survivorship – the property is owned in equal shares by two or more persons or entities. Upon the death of a joint tenant, the deceased’s interest is automatically transferred to the surviving joint tenants. This method avoids probate, making it a popular choice for unmarried couples and co-buyers. “John Doe, a single person, and Billy Bob, a single person, as joint tenants with right of survivorship, and not tenants in common.”
Thought and planning should be given when deciding how you will hold title to a property when purchasing. Community property laws, marital status, and ownership laws will all affect your long-term planning and goals. If you are unsure or have a unique situation, you should seek professional advice on what options are available to you.