NASE Blogs

Titles To Assets

Mar 24, 2011

Q: My husband and I have real estate and other assets. Some assets are titled in our names as joint tenants, but most just have both of our names on the titles. What should we do for estate planning purposes?

A: You’ve asked for help in a complex area of the law. The complexity arises from the fact that different states recognize different kinds of property titles and those titles sometimes mean different things from state to state.

Correctly titling assets is important for estate planning because the way assets are titled determines how those assets are transferred to heirs when their owner dies.  Incidentally, you don't say what state you live in but in most states assets that simply have several names on their titles with no other notations as to form of title will be considered to be held in tenancy-in-common and at the death of any individual title holder his or her share of those assets will pass according to the provisions of the decedent's will.

The most common forms of title are single ownership, community property, joint tenancy with right of survivorship (usually called simply "joint tenancy"), tenancy-in-common, and tenancy-by-the-entirety.  Additionally, in ten states property can be held as community property.  The ten states are Arizona, California, Idaho, Louisiana, Nevada, Texas, Washington, Wisconsin and in Alaska if the husband and wife have both signed a written document that contains certain specific language and also contains a community property agreement, and if some or all of their property meets Alaska's definition of community property.

As a general rule property titled in the name of only one person and property belonging to more than one person and titled as tenancy-in-common passes according to the will of the deceased title holder.  Joint tenancy (joint tenancy with right of survivorship) property generally passes to the surviving joint tenant(s) regardless of what the will of the decedent says.  However, be aware that at least five states have modified or eliminated joint tenancy.  Those states are:

Alaska:  Alaska allows no joint tenancy in real estate unless the joint tenants are husband and wife.

Ohio, Oregon, Tennessee:  Technically these states allow no joint tenancy but a right of survivorship may be created by express written agreement between joint owners.  Transfers between husband and wife are considered to be tenancies by the entirety.

Texas:  Technically there is no joint tenancy in Texas but two or more people can create a right of survivorship by signing a written agreement describing the property and that they intend to own it as joint tenants.  Married people are not exempt from this requirement and if they wish to hold property as joint tenants they also need to sign a written agreement as well. 

And finally five community property states have somewhat recently created a new way for married couples to hold title to property.  These states are Arizona, California, Nevada, Texas and Wisconsin. These states allow what is called "Community Property with Right of Survivorship".  This form of title allows one spouse's half-interest in community property to pass to the surviving spouse without probate, much as if the property had been in joint tenancy with right of survivorship. Note, however, that placing assets in this form of title might change the rights of creditors with respect to attaching assets of the parties. 

We strongly recommend that you consult with an attorney in your state about titling your assets so that they’re distributed as you want when either you or your husband dies.  

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