In Georgia, here are the most common ways in which you can hold title to property:
Sole Ownership: owned entirely by one person, even if the owner is married. If the person becomes incapacitated due to injury or illness, a spouse or family member typically would need to conduct business with regards to the property. The family member would not be able to do business transactions and they would be unable to act until a court appoints someone to act on behalf of the sole owner. Many people assume if there is a will, it will address the problem, yet a will does not go into effect until after a death and is not in effect if the owner becomes incapacitated.
Tenants in Common: allows for two or more people to hold title to real estate with equal rights during their lifetime to enjoy the property. A tenant in common title creates shares of ownership, and those shares will be distributed as directed in a will upon an owner’s death. Upon death, the decedent’s interest passes to his or her heirs named in the will who then become new tenants in common with the other tenants in common. In the absence of a will, the property goes to the heirs of the owner. As a tenant in common, the individual holds title for a respective part of the property and they are at liberty to dispose of said owned property or encumber it at will. The owners of their respective shares are permitted to use their portion of their property as collateral or in financial transactions. They may also have creditors place liens on only their portion of the property.
Joint Tenancy: a form of co-ownership where property is owned by two or more persons at the same time in equal shares. Each joint owner has an undivided right to possess the whole property and a proportionate right of equal ownership interest. When one joint tenant dies, his/her interest automatically passes on to the surviving joint tenant(s). This type of title is widespread among but not exclusive to married couples. Unmarried couples may also hold joint tenant title as can parents and their adult children. In the case of a couple, the death of one automatically transfers full ownership to the surviving owner without probate. In the event the surviving owner dies without adding another owner, or if both owners die at the same time, probate is almost certain to occur before the property can go to the heirs.
Being a co-owner means that to sell, refinance, or take any action to the property, both owners must agree to the business action. If there is disagreement or in the event your co-owner becomes incapacitated, the court will become involved to resolve the disagreement or to protect the interest of the one who has become incapacitated. Court involvement will occur even in the event the incapacitated owner is your spouse. Joint tenants also expose the property to both co-owners’ obligations and debts. If a creditor successfully sues your co-owner, you could lose your home. A will does not control any jointly owned assets, and you may mistakenly disinherit your family when your co-owner inherits your share, particularly in the case of second marriages with children from a previous union.
Trusts: While not technically a form of ownership, you may own real property through a Living Trust. Upon your passing, your interest would pass to successor trustees and/or beneficiaries you have designated in your trust.
State laws determine methods of holding and owning title to real estate property. Research should be done to determine the best method to acquire and hold title to real estate in the state you live. Assessing the best way to hold title to property may require the advice of a real estate, legal and/or tax professional.
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