Prior to a real estate closing, we are often asked, “how should I take title to the property I am buying.” Consequently, we shall discuss the common forms of vesting residential ownership that every buyer should be aware of prior to completing their real estate transaction.
Because real estate property is among the most valuable of assets, the question of how parties take ownership of their property is of great importance. The form of ownership taken (the vesting of title) will determine who may sign various documents involving the property and the future rights of the parties in the transaction.
These rights involve matters, including, but not limited to, real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor’s claims. The vesting form may also have significant probate implications in the event of death. Therefore, you should consult with one of our attorneys to discuss the appropriate way to hold title. Nonetheless, here is an overview of some of the most common forms of title recognized in Florida:
Tenancy in Common. Title held by two or more people. Each has an undivided interest in the property and share equal rights to use the property, despite any inequality in their interests. No right of survivorships exists. Individual tenants in common may sell or will their interests without participation or agreement by co-tenants. Upon death of co-tenant, probate of the estate is generally required to transfer the interest.
Joint Tenancy. Each tenant owns an undivided interest, with equal rights to use the entire property. The interests must be equal and each tenant has a right of survivorship. Upon death of a tenant, the interest passes automatically to the survivor.
Tenancy by the Entirety. Joint ownership of title spouses in which both have the right to the entire property. Upon death of one, title passes automatically to the survivor (right of survivorship.)
Trustees of a Trust. A trust is an arrangement in which legal title to property is transferred by a grantor to a trustee, to be held and managed by the trustee for the benefit of beneficiaries named in the trust. Most residential titles are not held in entity names. However, title to real property may also be vested in a corporation, parternship, or limited liability company.