Article - Deed Types
Colonial Beach Realtor
a division of Treck Realty
Understanding the manner in which your home is deeded is crucial, a fact underscored by a recent conversation I had. A friend, who bought a home with his then-girlfriend seven years ago and married her two years later, reached out amidst a divorce. In the process of refinancing to buy out his spouse, he discovered a $13,000 lien placed on their home due to a debt she incurred during their marriage. Frustrated, he couldn't fathom how a debt from one spouse could impact the property, given their marital status.
I queried whether they had updated their deed post-marriage to reflect their new legal status, to which he mistakenly believed such changes occurred automatically. This misconception highlights a common oversight; the legal system, including courthouses, does not automatically update deed titles due to changes in marital status.
Here are the primary ways to hold title to your home, each with distinct implications:
Joint Tenants:
Provides equal ownership rights to all parties. Upon the death of one tenant, their share automatically passes to the surviving tenant(s). However, it does not shield you from the debts of other tenants.Tenancy in Common:
Ownership is divided into percentages. If one owner dies, their portion passes to their heirs, not automatically to the other owner(s).Tenancy by the Entirety:
Exclusive to married couples, offering protection from creditors for debts that are not jointly incurred.Sole Ownership:
Signifies that a single individual owns the property in its entirety. Adding another person to the deed transforms the ownership into either joint tenancy or tenancy in common, depending on the specifics of the deed change.
This incident serves as a potent reminder of the importance of understanding and properly managing how your property is deeded. Such knowledge is essential, not just at the time of purchase, but as life circumstances evolve. Sharing this insight is part of my commitment to caring for and informing my clients and community. Knowledge empowers you to protect your assets and navigate the complexities of property ownership with confidence.