This article from our own Kelly Vincelette,
at Cornerstone Title.
The way in which people hold title to a property can have
significant legal and tax implications,
including whether the property must go
through probate upon death and what taxes the heirs must pay when they sell it.
According to some attorneys, one of the best ways to hold title to homes and
other real property, is in a revocable living trust, which offers the advantage
of avoiding probate costs and delays. All that is involved is the cost of
creating such a trust, and deeding the property into it.
Until the death or disability of the trust creator, the home and other real
estate in the living trust, plus any stocks, bonds, bank accounts, automobiles
or other major assets held in the living trust, may be bought, sold and
financed at the creator’s discretion.
If the trustor becomes incapacitated, the named alternate trustor (such as a
spouse or adult child) takes over management of the trust assets. When the
trustor dies, the assets are distributed according to the trust's terms.
Privacy is also an advantage. Unlike a will, which becomes part of the public
probate file, the living trust terms remain private. Court challenges of living
trusts are virtually impossible, whereas wills are frequently challenged by disappointed
relatives.
There are other customary ways to hold title, such as:
-
Sole ownership - You hold the title in your name
alone.
-
Tenancy in common - This means two people own the
property together, but upon the death of one, the interest of the descendent is
distributed according to a will – or if there is no will, according to state
law.
-
Joint tenancy - This is a commonly used option,
which means two people own the property together. If one dies, the other gets
it without the property passing through probate.
People should always evaluate which form of title is right
for their situation with a California qualified real estate attorney.
Original article from Barbara Pronin,
author at RISMedia.
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