One of the most important aspects of the entire escrow procedure is how you take title becuase it not only determines how you will be insured it has significant legal and tax consequences as well. It can create some unanticipated complications in the future when you decide to transfer the title to someone else. So much depends upon the precise way to hold title, in fact, that you should not rely on advice from a real estate agent, escrow officer, or friend when you are trying to determine how to hold title. You would be wise to consult your attorney or tax consultant about to hold title in your particular circumstances.

The four most common ways to hold title:

• Joint Tenancy -- The main distinguishing characteristic of joint tenancy is the right of survivorship. If one of the joint tenants dies, his interest passes automatically to the surviving party or parties instead of being tied up in lengthy probate proceedings. When two or more people own a property as joint tenants, they own an undivided equal interest in the property and have the same rights to the use of the entire property, that is, neither co-tenant can distinguish which portion of the land he owns.


• Tenancy in Common -- When two or more persons togetherm whether their shares are equal or unequal, they are said to hold the property as tenants-in-common. Tenancy-in-common is so standard as a form of ownership for unrelated buyers that it is generally presumed to be the way they hold title if nothing else appeards to the contrary. The shares are also presumed to be equal unless they are listed otherwise on the deed, and each of the tenants has equal rights of posession.


• Community Property -- Holding title to real property as community property is a type of ownership available to married couples only. At, present there are nine states which are considered "community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. These states regard any property purchased during a marriage as community property.


• Sold and Separate Property -- Holding title as "sold and separate property" means that no one else has any interest in it. If you are married and want to take title this way, you may, but you should record a quitclaim deed from your spouse to yourself so that no community interest could be claimed at a later date (applies to only in community-in-property states).

In addition you need to keep in mind whether you are in a community property sate such as Texas. In states like this selling can be a little difficult if the wife/husband doesn't want to sign papers when selling the property in the case of a divorce. So definitely check with your legal council to see what is best for your situation.

Additional Ways to Hold Title


Corporation
A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.


A Partnership
A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.


A Trust
A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.