Buying a Home > Estate Planning Name That (Property) Title!

Team PV

“Titling? Can I call this The Neverending Home Story?”

Maybe, except that dark storm is definitely more of a Something than the Nothing. And homeowners insurance may not cover it.

Title is a mark of ownership of a piece of property and it’s transferred to you when you purchase your home. The deed, another term you’ve likely heard tossed around, is a legal doc that shows the transfer of title. And now that you have the title, it’s time to make it yours:

Sole ownership: Complete ownership over the property. Sounds pretty awesome, but there are definite pros and cons.

PROS

  • Physical control: No need for consent from other titleholders of the home; you can sell the property or remodel whenever you want. It’s the least complicated of any title ownership- you and only you are calling the shots with your property.
  • Divorce: If you bought your home before you got hitched and never changed to a joint ownership title, your ex can’t split the property if you divorce.
  • Estate Planning: Sole owners can leave the property to anyone they choose after they pass way.

CONS

  • Probation: If your will doesn’t specify who inherits your home, your property enters probate to transfer the title. Though your heirs will still likely take over the title, they’ll have to wait until the court has accepted your death certificate and necessary legal procedures are carried out. Let the waiting game begin.
  • Costs: With sole ownership, you’re also on the hook for remodeling costs and taxes. Unless you earn enough to cover those expenses or have some help, your wallet will need some remodeling as well. 

Joint tenancy: Multiple owners listed on the property title all have equal rights and input over the property. Especially helpful for married couples are survivorship rights should one of the titleholders pass away; in some states, those rights aren’t automatically assumed, so check with your lawyer or title company.

PROS

  • Avoid probate: Transfer of ownership is automatic with joint tenancy, so you skip the long probate process when one of the titleholders passes away.
  • Equal responsibility: All owners hold equal responsibility of the property. Which means they enjoy equal share of the liabilities as well. Like marriage, you take the good with the bad.

CONS

  • Potential instability: Rocky relationships aren’t just bad for your personal life; they’re not so great for a joint tenancy title either. If your relationship hits the skids, neither of you can sell your home without the approval of the other. If you and your partner aren’t married, you may need to petition a court to divide the property and sell it.
  • Asset Control: If your property automatically transfers to your spouse or partner in the joint tenancy, they can do what they please with the title: rent, sell, or bequeath it to their entitled stepchild with a hoarding problem. Control don’t live here anymore.

 

 Photo: Modified from Humusak and Ron Porter

Hide Notes Show Notes