Just like many young married couples with children, my wife and I bought our first home several years ago. Also, many of our friends have done the same thing over the last several years. As the attorney in the group, I always field phone calls regarding their legal questions.
One question that I fielded recently was
“How Should We Own Title To Our Home”
In Tennessee, there are a few different options that you have:
- Sole Ownership
This is where only one person is buying the home and they are taking title in their own name. Obviously, this is of little help to married couples.
- Tenants in Common
This is where each owner owns an equal interest in the home. If it is a married couple, each would own a ½ undivided interest in the home and could sell that home or transfer to whomever they wanted. Also, they could even have their ½ interest encumbered with lawsuits and other creditor liens. Another downside, is that any interest in a home that you own as Tenants in Common would not pass automatically to the surviving spouse and would be required to go through probate.
- Joint Tenants with Rights of Survivorship
This is where each owner owns the home jointly with the other spouse. At the death of the first spouse, their interest in the home automatically transfers to the surviving joint owner. Therefore, probate is avoided. However, it doesn’t avoid probate at the death of the second spouse’s death. This is not always beneficial.
- Tenants by the Entirety
This is a special type of joint ownership that exists only between married couples. Just as with joint tenancy, the interest in the home automatically transfers to the surviving joint owner at the death of the first spouse. Again, probate is avoided with this option. However, it doesn’t avoid probate at the death of the second spouse. This option is also not the most beneficial.
- Revocable Living Trust
This option is where you title the property to your revocable living trust. This is the most advantageous option. At either death, the property does not pass through probate, but instead immediately passes to the beneficiaries named in your living trust. It also prevents guardianship and conservatorship proceedings that would be required simply to pay your bills, or even sell your home if necessary, should you become ill, involved in an accident, or otherwise incapacitated. When I speak with young families with children who are buying their home, I normally discuss the benefits of a revocable living trust and to develop a life-long relationship with an estate attorney that can continue to provide them expert legal advice as they grow older and as their life circumstances change (or the law changes).
If you have more questions about how you should own title to your home, schedule a time to meet with your Nashville, Tennessee Estate Planning Attorney to discuss your legal questions and determine which legal options might be best for you and your family.
Call Daniel A. Perry today at (615) 490-0477 to begin the process of protecting your loved ones and your family today!