How You Take Title -- Advantages and Limitations (page 2)


CONCURRENT CO-OWNERSHIP INTRESTS

The comparison below is provided for information only, it should not be used to determine how you hold title.

We strongly recommend that you seek professional counsel from an attorney and/or CPA to determine the legal and tax consequences of how title is vested.

 

COMMUNTIY PROPERTY

JOINT TENANCY

TENANCY IN COMMON

TENANCY IN PARTNERSHIP

TITLE HOLDING TRUST

Parties

Only husband and wife

Any number of persons

(can be husband and wife)

Any number of persons

(can be husband and wife)

Only partners

(any number)

Individuals, groups of persons, partnerships or corporations, a living trust

Division

Ownership and managerial interests are equal except control of business is solely with managing spouse

Ownership interests must be equal

Ownership can be divided into any number of interests equal or unequal

Ownership interest is in relation to interest in partnership

Ownership is a personal property interest and can be divided into any number of interests

Title

Title is in the "community". Each interest is separate but management is unified

Sale by joint tenant servers joint tenancy

Each co-owner has a separate legal title to his/her undivided interest

Title is in the "partnership"

Legal and equitable title is held by the trustee

Possession

Both co-owners have equal management and control

Equal right of possession

Equal right of possession

Equal right of possession but only for partnership purposes

Right of possession as specified in the trust provisions

Conveyance

Personal Property (except "necessaries") may be conveyed for valuable consideration without consent of other spouse; real property requires written consent of other spouse, and separate interest cannot be conveyed except upon death.

Conveyance by one co-owner without the others breaks the joint tenancy

Each co-owner's interest may be conveyed separately by its owner

Any authorized partner may convey whole partnership purposes. No partner may sell his/her interest in the partnership property.

Designated parties within the trust agreement authorize the trustee to convey property. Also, a beneficiary's interest in the trust may be transferred.

Purchaser's Status

Purchaser can only acquire whole title of community; cannot acquire a part of it.

Purchaser will become a tenant in common with the other co-owners in the property.

Purchaser will become a tenant in common with the other co-owners in the property

Purchaser can only acquire the whole title

A purchaser may obtain a beneficial interest by assignment or may obtain legal and equitable title from the trust.

Death

On co-owner's death, ½ belongs to survivor in severalty. ½ goes by will to decedent's devise or by succession to survivor

On co-owner's death, his/her interest ends and cannot be disposed of by will. Survivor owns the property by survivorship

On co-owner's death his/her interest passes by will to devisee or heirs. No survivorship right

On partner's death, his/her partnership interest passes to the surviving partner pending liquidation of the partnership. Share of deceased partner then goes to his/her state

Successor beneficiaries may be named in the trust agreement, eliminating the need for probate

Successor's Status

If passing by will, tenancy in common between devise and survivor results

Last survivor owns property

Devisee or heirs become tenants in common

Heirs or devisee have rights in partnership interest but not in specific property

Defined by the trust agreement, generally the successor becomes the beneficiary and the trust continues

Creditor's Rights

Property of community is liable for debts of either spouse which are made before or after marriage. Whole property may be sold on execution sale to satisfy creditor

Co-owner's interest may be sold on execution sale to satisfy creditor. Joint tenancy is broken, creditor becomes a tenant in common

Co-owner's interest may be sold on execution sale to satisfy his/her creditor. Creditor becomes a tenant in common

Partner's interest cannot be seized or sold separately by his/her personal creditor but his/her share of profits may be obtained by a personal creditor. Whole property may be sold on execution sale to satisfy partnership creditor

Creditor may seek an order for execution sale of the beneficial interest or may seek an order that the trust estate be liquidated and the proceeds distributed

Presumption

Strong presumption that property acquired by husband and wife is community

Must be expressly stated

Favored in doubtful cases except husband and wife case

Arises only by virture or partnership status in property placed in partnership

A trust is expressly created by an executed trust agreement