A house title isn’t a tangible document kept in your possession like a driver’s license or a passport. It’s a legal term that denotes ownership. As the homeowner, it gives you the right to use and sell the property.
But house titles aren’t one-size-fits-all. Different titles are appropriate for various circumstances, so it’s crucial to understand your options and choose the best way to hold title to your home. This can make ownership clear and prevent legal problems in the future.
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The terms “deed” and “title” are sometimes used interchangeably. But although both involve ownership of a home, they aren’t the same.
Numerous factors determine the best way to hold title, including whether you’re buying the home alone, as a couple, or with a non-spouse co-owner.
If you’re single and buying a property alone, you can title the house as sole ownership. This gives you full control of the home, meaning you can sell without consulting anyone. You’re solely responsible for liabilities connected with the property and decide who inherits it in the event of your death.
This is when two or more people co-own a property with equal shares. If one co-owner dies, their share automatically passes to the other owner(s) without going through probate.
Probate is a legal proceeding that authenticates wills.
Joint tenancy can occur between spouses, unmarried couples, business partners, or friends and relatives who co-own. Although the property can’t be sold without permission from all parties, each owner can sell or transfer their share without permission.
This way of holding a title is only available in some states and applies to married couples. In a community property state, property acquired during the marriage is equally owned by both spouses (regardless of who paid for the home).
If one spouse dies, their interest in the property automatically passes to the surviving spouse. Since they have equal ownership, they can’t sell or transfer the house without the other’s permission.
This is another way to title a home when two or more people own a property. However, each party doesn’t own equal shares. Each owner can sell or transfer their share of the property to someone else without permission, and if an owner dies, their share passes to the beneficiary listed in their will. This type of title is common between unmarried couples.
This type of joint ownership is only available to married couples. Spouses have equal ownership of the property, but they can’t sell or transfer their share without the other’s permission. If a spouse dies, their share passes to the surviving spouse without going through probate.
You can also put your house into a living trust, in which case you become the trustee and the beneficiary. You decide how to distribute this asset upon your death, and with the title in a trust your beneficiaries can inherit the home without going through probate.
Here are advantages and disadvantages of each type of house title:
Before choosing how to title your home, you must consider the relationship between owners.
You might choose sole ownership as a single owner, which is simple and straightforward. Keep in mind, though, under this title, the property will likely go through probate after your death. A living trust, on the other hand, provides a smoother transfer to your beneficiaries — and they can avoid probate and estate taxes.
Consult an estate planning attorney for guidance on the best way to title a house based on your circumstances.
To add someone’s name to a house title, you’ll first need to execute a new deed with the assistance of a real estate attorney or a title company. The new deed includes a legal description of the property, names of current owners, and the new owner.
A house title is vital in real estate because it provides details about the rightful owner(s) of a property. There isn’t a single way to title a property, so it’s important to familiarize yourself with the different ways and choose the right one to protect your investment.
Authored By: Valencia Higuera The Mortgage Reports contributorValencia Higuera is a freelance writer from Chesapeake, Virginia. As a personal finance and health junkie, she enjoys all things related to budgeting, saving money, fitness, and healthy living.
Reviewed By: Aleksandra Kadzielawski The Mortgage Reports EditorAleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience in mortgage and real estate to help consumers discover the right path to homeownership. Aleksandra received a bachelor’s degree from DePaul University. She is also a licensed real estate agent and a member of the National Association of Realtors (NAR).