“Well, I don’t know. What are the choices?” That was always my answer in the past when asked how I would like to hold title. That question generally comes up if you are buying property with someone else, but it should come up every time you buy property. In my experience at least, usually the title person will say something like “Well, joint ownership with rights of survivorship is what a lot of people do, that way if you die the other person will own the property.” I always said “That sounds fine” and let it go at that.
Which of course is not the way to go about decisions like that. It matters how you hold title to real estate, and there are multiple options. It turns out that our estate lawyer recommended we change the way we had taken title on our house, so that we could hold it in a way that would have the largest advantage tax-wise if one of us were to die. Here is a quick rundown that I found on the internet of the most common choices available:
Joint tenancy (with or without right of survivorship)
Tenancy in common
Community property (with or without right of survivorship)
Tenancy by the entirety
Each of these has tax implications upon your death, or divorce if you are married. The way you choose to hold title can also affect whether or not you are able to leave your share of a property to someone else via a will (automatic transfers to another party override whatever your will says, for example). So if you are considering buying property, check with a lawyer to be sure you are holding title in the most advantageous way.