One of the important decisions made when buying a piece of property is, how you will take title.
How you take title may affect your future tax liabilities and could eliminate the need for a probate court by your heirs.
Described below are the various ways to hold title in Arizona.
The community property with right of survivorship title is held by husband and wife, where title vests to the surviving spouse upon the death of the other.
The community property title. Since Arizona is a community property state, there is a statutory presumption that all property held by married couples is community property unless otherwise stated. Only married people can hold title in this fashion.
Joint tenancy with right of survivorship title. A method of ownership between two or more people, where title transfers to the survivor(s) upon the death of any of the owners. If a married couple chooses to take title in this fashion, they must specifically accept the joint tenancy of the deed to avoid the presumption of community property.
Tenancy in common title. Ownership by two or more people who do not require survivorship rights. Each party owns a specified interest in the property, which must total 100 percent.
Sole and separate title. Typically used when a married person holds title without their spouse. This can be accomplished through a gift, descent, specified intent or ownership previous to the marriage.
If a spouse is to acquire title in this fashion, a disclaimer deed must be signed by the other spouse. If community funds are used toward this property, it will render the property as community property.
The single title is used when a person has never married before.
The unmarried title is for a person who was married, but is currently single.
The beneficiary deed title. The Arizona Legislature authorized this type of deed for estate planning purposes. Upon the demise of the title holder, the property passes directly to the beneficiary and avoids probate court.
There are also provisions to hold title in partnerships, general partnerships and corporations.
You may wish to review how your properties are held, and consult with your attorney and accountant on the most advantageous method for your circumstances.
Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.