If you own a home, be sure that you understand how you own it; in other words, the way that you legally hold title to it. This is very important, because if you own your home with someone else, the form of the title affects who would take ownership of it upon your death.
If you don't know how you own your house, you're certainly not alone. Many people don't remember what they put on the forms when they were signing that encyclopedia-sized stack of papers at loan closing. To find out, look for the grant deed that transferred legal ownership of your house from the former owner to you. If you can't find your grant deed, don't panic – just read the tips below. If you run across something called a Deed of Trust in your stack of homeowner documents, that's not what you're looking for. The Deed of Trust is what gives your lender the legal right to repossess your property if you don't pay off the loan.
If you can't find a copy of your grant deed anywhere, ordering a duplicate is easy. Once the deed has been recorded (in other words, filed with the county land records office after the property sale is completed), it becomes public record. You can order yours from the county in which your home is located for a nominal fee. Title companies can also order deeds for you, but they often charge a bit more than if you contact the county directly.
Once you've got your deed in hand, look to see how it states that you own the property. Each type describes how the people on the deed share ownership and affects what happens if one of them dies. Listed here are examples of what you might find:
- Jim, as his sole and separate property (SP)
- Jim and Sue, husband and wife, as joint tenants (JTWROS)
- Jim and Sue, husband and wife, as community property (CP)
- Jim and Sue, husband and wife, as community property with right of survivorship (CPWROS)
- Jim and Sue, husband and wife, tenancy by the entirety (TBE)
- Jim, Sue, and Martha, as tenants in common (TIC)
Separate property. If you own the property separately, it usually means that the property is yours to give away at death to whomever you wish. However, in community property states (Arizona, California, Idaho, Nevada, New Mexico, Washington, and Wisconsin), a spouse may own a share of the property, even though only the other spouse's name is on the deed itself, if wages earned during the marriage were used to pay off the mortgage or make improvements to the property.
Joint tenancy. The most common way for couples to own property is as joint tenants. This means that they each person owns an equal share in the property. If one owner dies, the survivor will then own the entire property by "right of survivorship." The surviving joint tenant receives the property automatically; property owned in this manner cannot be left to others by a will or trust, which allows the surviving joint tenant to avoid the probate process altogether.
Community property. In community property states, married couples (and registered domestic partners as well) can take ownership as community property. They will each own a half-interest in the property. Unlike joint tenants, the owners can pass their halves by will or trust upon their death.
Community property with right of survivorship. Certain states allow married couples (and registered domestic partners) to own property as community property with right of survivorship. Under this form of ownership, if one of them dies, the survivor automatically owns the entire property by right of survivorship without a probate proceeding.
Tenancy by the entirety. In about half the states, married couples (and in some states, registered domestic partners) can own property as tenants by the entirety. Like joint tenancy, this form of ownership means that the surviving spouse or partner owns the entire property, without going through probate.
Tenancy in common. Multiple owners can be listed as tenants in common. These owners can divide their interests in unequally (for instance, one person can own 80% and another 20%), and each owner can pass his or her interest by will or trust at death.