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The Various Ways You Can Take Title In A Real Estate Transaction

Wondering how you might take title when you buy your new home? If you’re single or divorced, you’d obviously have sole ownership. But if you’re married or in a relationship, or have a living trust, there are several options. The exact language varies by state although the concepts are similar. In Florida, here are the most common ways your deed might read:

Taking Title In A Real Estate Transaction

Tenants in common. This is the legal entity the courts assume if the deed is otherwise silent. This means if there are two people taking ownership and one dies, that person’s half goes to his probate heirs, not directly to the other owner. If there are three owners, each actually owns a third, four owners a quarter, and the like.

Joint tenants with rights of survivorship. In the case of a death, this deed give the surviving owner the entire property. So if there’s a non-married couple with kids from prior relationships and one passes away, his or her share automatically goes to the remaining partner. As the new sole owner, that person can later choose to leave the home to anyone they wish– excluding their late partner’s children if they desire. (This is the reason couples on second marriages often choose tenants in common for their deeds together.)

Tenancy by the entireties. This can only be used for people who are legally married. Similar to joint tenants with rights of survivorship, each party owns 100%, so if one passes away the property automatically goes to the other. Unlike with JTWROS, however, if a judgment is entered in court against only one of the owners, it cannot become a lien on the property.

Trust. A trust can also take title to a property. This is typically recorded on the deed as “Jane Smith, Trustee of the Jane Smith Trust dated August 1, 2016.” This can be useful for an older person whose home is their main asset, because they can avoid probate; the successor trustee steps in as the owner upon the person’s death. This has to be done carefully, though, because I have seen people have problems selling their home in a trust because no trust was in legal effect when the property was purchased–or worse, the trust (a document drafted by a lawyer and not filed with the court) cannot be found.

If you’re looking to buy or sell a home, Contact us by email or call the Law Office of Gary Landau at 954-979-6566 for a FREE consultation. Gary Landau personally returns all calls to him.

Which Real Estate Deed Is Right For You?

Which Real Estate Deed Is Right For YouA deed may just be a piece of paper, but it is the lifeblood of every real estate transaction. The deed documents who owns the property, and therefore, who can sell it. Sellers and buyers sign a deed at the closing to legally transfer the home or land.

Deeds differ in what they promise a buyer. Here are the five most common deeds used in Florida, and what they mean:

  • General Warranty Deed. A general warranty deed provides the most assurances for the buyer, because the seller is making a legal promise that he is the owner. Any (rare) problems with title that may later arise, such as having a long-ago owner claim he never sold his share, remain the responsibility of the seller to fix. This is the most common type of deed in real estate transactions.
  • Special Warranty Deed. Here, the warranty is more limited—providing legal assurances only that the seller has not done anything to negatively impact the title, not that title is necessarily clean going back to the property’s beginning. Special warranty deeds are typically used by condominium or subdivision developers, in commercial real estate transactions, or when a person has inherited the property.
  • Quitclaim Deed. With a quitclaim deed the seller makes no representation that he/she actually owns the property they are conveying. These may be used to clear title problems, when a business transfers commercial property to a subsidiary, or when a seller wants to include a family member on the deed. I frequently do quit claim deeds for elderly owners who want to add their children to their deed or to sell their home to them outright.
  • Life Estate Deed. With a standard life estate deed, you name the person who will inherit your property, but you keep ownership of it during your lifetime. You don’t retain the right to sell or mortgage the property, and you could be liable to the beneficiary if you let a house fall into serious disrepair and therefore lower the value. One danger of adding someone to your deed is that any legal judgments on the newly added person now attaches as a lien on the home.
  • Lady Bird Deed. Also known as an enhanced life estate deed, you also keep the right to use the property during your lifetime even as it is transferred to someone else. Here, though, you can sell the property if you want. Because a home owned via a lady bird deed doesn’t go through probate, nor does it jeopardize Medicaid eligibility for the life estate holder, I sometimes use this deed when elderly clients want to pass their home to their children. As with other life estate deeds, though, legal judgments on the children can become liens on your home.

To learn more about real estate transactions and the deed that is best for your situation, contact The Law Offices of Gary Landau