Taking "title" to the home means the home will be recorded with the county courthouse in a certain way.
If you're not sure what "title" is, you should talk to the settlement attorney about it, and if you're still not sure how to proceed after doing that, you should talk to an attorney you trust. This is just an overview, and is not a substitute for good advice! You can also read this definition of "title" in Wikipedia.
There are generally 3 ways to take title to a property:
- Tenancy By The Entirety (married couples only)
- Joint Tenancy With Right of Survivorship (similar to above, but unmarried)
- Tenants In Common (usually used by investors or non-related parties)
Each approach has its own pro's & con's from many perspectives - legal, survivorship, and structure. We'll go over them here:(Note - we pulled these definitions from this Wikipedia page)
Tenancy by the entirety is a type of concurrent estate available only to married couples, wherein ownership of the property is treated as though the couple are a single legal person. Like a JTWROS, the tenancy by the entirety also encompasses a right of survivorship, so if one spouse dies, the entire interest in the property passes to the surviving spouse, without going through probate.
In order for a tenancy by the entirety to be created, in some jurisdictions the party or parties seeking to create it must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety". Also, the parties must share the four unities necessary to create a joint tenancy with right of survivorship - time, title, interest, and possession - plus a fifth unity, marriage. However, unlike a JTWROS, neither party in a tenancy by the entirety has a unilateral right to sever the tenancy by the entirety - if it is to be undone, or if any part of the property is to be conveyed to another person, this must be carried out by both spouses. A divorce breaks the unity of marriage, leaving the default tenancy, which may be a tenancy in common. Many US jurisdictions no longer recognize tenancy by the entirety. Where it is recognized, benefits can include the ability to shield entireties property from creditors of only one spouse, as well as the ability to partially shield entireties property where only one spouse is filing a petition for bankruptcy relief.
Tenancy by the entirety is only possible when the joint owners are husband and wife. Tenants by the entirety provides for a common law right of survivorship. The property goes automatically to the surviving spouse. No Will, probate or other legal action is necessary. One spouse can not use a Will to leave an interest to someone else.
This tenancy also follows the ancient legal theory that a married couple is one entity. Therefore, one owner may not convey an interest without the other. A creditor with a judgment against one of the owners can not collect it from entirety property. If there is a judgment against one spouse, the settlement attorney will ask for a continuous marriage affidavit from the seller. In it, the sellers will certify they have been married for the entire time they owned the property. Then, the judgment does not attach to the property or the proceeds of sale, as long as they are also maintained in a tenancy by the entirety bank account.
Upon divorce, tenancy by the entirety automatically converts to tenants in common.
Joint tenancy with right of survivorship or JTWROS is a type of concurrent estate in which the joint owners have a right of survivorship, meaning that if one owner dies, that owner's interest in the property will automatically pass to the remaining owner or owners. On the death of one of the tenants, the whole of the property passes to remaining tenant(s); this is the "right of survivorship." The deceased tenant's property interest simply evaporates by operation of law, and cannot be inherited by his heirs (which means it avoids going through probate). Under this type of ownership, the last owner living takes all.
It is important to note, however, that creditors' claims against the deceased tenant's estate may, under certain circumstances, be satisfied by the portion of ownership previously owned by the deceased, but now owned by the survivor or survivors. In other words, the deceased's liabilities can sometimes remain attached to the property.
This form of ownership is common between husband and wife, and parent and child, and in any other situation where parties want absolute ownership to immediately pass to the survivor. For bank and brokerage accounts held in this fashion, the acronym JTWROS is commonly appended to the account name as evidence of the owners' intent.
In order to create this type joint ownership, the party or parties seeking to create it must use specific language indicating that intent. For example, if Joey wishes to convey property for Kelly and Lisa to share as joint tenants with right of survivorship, Joey must state in the deed that the property is being conveyed "to Kelly and Lisa as joint tenants with right of survivorship, and not as tenants in common."
Tenancy in common is the default form of concurrent estate, in which each owner, referred to as a tenant in common, is regarded by the law as each owning separate and distinct shares which may differ in size. This form of ownership is common where the co-owners are not married or have contributed different amounts to the acquisition of the property. Also, if joint owners had attempted to use another form of joint ownership such as a joint tenancy with right of survivorship or a tenancy by the entirety, and the effort was for some reason invalid, the joint owners would then be tenants in common. If conclusive evidence is not available of the desire to create a tenancy with rights of survivorship or a tenancy by the entirety, courts will determine that a tenancy in common has in fact been created.
Tenants in common have no right of survivorship, meaning that if one owner dies, that owner's interest in the property will pass by inheritance to that owner's devisees or heirs, either by will, or by intestate succession.