Legal Issues: Property Ownership

Property Ownership Two major or key points: 1. Degree of ownership interest. 2. Relationship between the co-owners if more than one owner exists.

Types of Property Real Property – land, buildings, mineral rights, etc. Personal Property  Tangible – machinery, equipment, autos, household items, grain, livestock, etc.  Intangible – bank accounts, stock, bonds, life insurance, etc.

Ownership of Real Property Fee Simple or Fee Simple Absolute Life Estate and Remainder Interest Sole Ownership Co-ownership Tenancy-in-Common Joint Tenancy Tenancy by the Entirety

Fee Simple Ownership All rights of ownership. Sell, give away, lease, use, etc. in any manner the owner or owners choose.

Life Estate and Remainder Interests Holders share property interests with remaindermen. Life tenant manages and receives income from the property during their lifetime. They cannot dispose of the property or mortgage it without consent of the remaindermen. The terms and provisions of a Life Estate can vary greatly depending upon the purpose for which it was created.

Sole Ownership Only one name appears on the title or deed. Owner has all rights to sell, give away, mortgage, etc. Property will pass to heir or heirs by will, trust, or law of descent if neither of the prior items exist.

Co-Ownership of Property Tenancy-in-Common Joint Tenancy with Right of Survivorship Tenancy by the Entirety

Tenancy in Common Usually created when someone dies without a will (intestate). Owners have an undivided interest in the property. May cause problems when one or more of the owners want to sell their share. Can be messy when more than one generation is involved.

Joint Tenancy – With Rights of Survivorship Most common type of co-ownership. Will has no effect on the transfer of this property. Surviving joint tenant(s) receives all. May risk disinheriting children should surviving spouse remarry. Property is at risk of being included in legal action involving one joint tenant being sued.

Tenancy by the Entirety Same concept as Joint Tenancy ownership. Restricted to husband and wife only. Cannot be severed without consent of both parties. At death, all property transfers to the survivor.

Homework Assignment Determine how your property is owned. Land and Home: Abstracts, Deeds, etc. (Records from County clerk’s office) Farm and Non-farm vehicles: Titles Bank accounts: Signature cards Investments: Stock Certificates, Brokerage Accounts, etc.

Example: List of Property and Ownership Property Description Smith Quarter Home Inherited Wal-Mart Stock Ownership Type Tenants in Common (Husband and his Brother) Joint Tenants with Rights of Survivorship (JTWRS) Sole ownership: Stock in your name only