Having your assets in order when preparing for divorce is priority. For most divorcing couples their home is their largest asset; for many it was the biggest investment they have ever made. Splitting property is one of the hardest and emotionally driven decision in the divorce process. Knowing how and who owns title to your real estate can help tremendously.
Who is going to get the house? Should you sell the house? These decisions are major.
Whether it’s your family home, an investment rental property, commercial property, or a second home, the title determines your ownership. There are different types of titles for real property,and you should know the general differentiation to ensure you’re position is clear.
Joint Tenancy – A joint tenancy title is when two or more individuals jointly hold the title to a piece of real estate. With joint tenancy, you have equal rights to enjoying the property during your lives. If one of the people dies, then their ownership rights pass on to the surviving tenants, in a legal situation called the right of survivorship.
Tenancy in Common- Tenancy in common or TIC is a title situation where two or more people hold real estate jointly. They could have either equal or unequal ownership percentages. All people listed on the title have equal ownership. Each owner has a right to use and occupy the entire property.
Tenant by Entirety – This type of ownership assumes that a couple is a single person in the eyes of the law.
The benefit here is that you don’t have to take legal action if your spouse dies. The disadvantage is that you can’t subdivide the property. When divorced, the title automatically converts to tenancy in common.
Community Property – Spouses share this form of ownership during their marriage. Under community property, each spouse owns but can also owe everything equally, no matter who’s earning or spending the money. If there’s a divorce, each spouse gets an equal share of the real estate. There are nine states that have community property laws.