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Good, Bucy, Elson & Drescher, attorneys at law

Holding Title to Real Property

I spend a large part of my practice helping clients create plans that will ensure their estates are distributed according to their desires in the most effective way possible.  This involves addressing real property properly within the plan created, often leading to an interesting discussion about how title is held and what effect that has on the overall plan.

Joint Tenancy with Rights of Survivorship (JTROS)

One of the most basic ways of holding title to real property, JTROS results in all “joint tenants” owning the same interest in the property (two owners = 50/50; three owners = thirds, etc.).  When one “joint tenant” dies, their interest in the property disappears by “operation of law” and the remaining “joint tenants” own the property in equal shares.  No testamentary disposition of one’s interest in the property is possible, because at the moment of death that interest vanishes.  Since only individuals die, it is my position that neither Trusts nor couples (as a unit) can be “joint tenants” (although I have seen deeds attempting this).  JTROS will delay probate until the last “joint tenant’s” death, at which time the entire property will be subject to that decedent’s estate plan, or lack thereof.

Tenancy in Common (TinC)

By contrast, TinC is not limited to individual owners and each “tenant’s” interest in the property may be different (two owners may = 60/40).  Each “tenant” may transfer their ownership interest during life and at death.  Trusts and couples (as a unit) may act as a single “tenant”.  TinC will notavoid probate because a passable interest exists at death.

Tenancy by the Entirety (TbyE)

TbyE is recognized by 26 states, including Oregon, and works much in the same way as JTROS, but is reserved for married couples.  Asset protection advantages may exist by treating the TbyE as separate entity; however, a real estate or tax specialist should be consulted to fully understand how this works.  As with JTROS, TbyE will only delay probate until the death of the surviving spouse and may not ultimately be an effective estate planning tool.

Community Property (CP)

CP, another way for married couples to hold real property, is recognized by 10 states, including California and Washington.  In community property states, assets are considered part of the marital unit and when one spouse dies, the remaining spouse automatically owns the entire property.  No asset protection exists; however, there may be tax benefits to the ultimate beneficiaries.  As with JTROS and TbyE, this will delay, but not avoid, probate.

Trust Owned Property

When a Trust owns property, disposition of that property is controlled by the Trust and probate is avoided.  Ownership by a Trust should not affect any benefits afforded to married couples, assuming the Trust includes the appropriate language.

Know how you hold title and what that means.  Understanding the basics of real property titles and working with an attorney well-versed in the options can go far in ensuring one’s property is protected best for each specific scenario. 

Contact us today to learn more about our services or any questions you might have for Good, Bucy & Elson.

Good, Bucy & Elson, Attorneys at Law

Robert W. Good, Attorney at Law
Scott C. Bucy, Attorney at Law
Jo Hanna Dorris, Paralegal