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Taking Title to Real Estate in Arizona
You have found a home that you really like and have decided to make an offer. When you sit down to write the contract your agent will ask you how you would like to take title. This is a question that you should prepare for and be able to answer.
Arizona is a community property state and the way in which one takes title to property can have future legal and tax consequences. Each method has its own legal jargon to support that type of ownership. These methods are.
COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP: This is a method of ownership by husband and wife that vests title in the surviving spouse upon the death of one of the spouses.
COMMUNITY PROPERTY: Arizona is a community property state. There is a statuary presumption that all property acquired by husband and wife is community property. Community property is a method of co-ownership for married persons only. Upon death of one of the spouses, the deceased spouse’s interest will pass by either a will or intestate succession.
SOLE AND SEPARATE: Real Property owned by a spouse before marriage or any acquired after marriage by gift, devise, descent or specific intent. If a married person acquires title as sole and separate property, the spouse must execute either a disclaimer deed or a quit claim deed.
JOIN TENANCY WITH RIGHT OF SURVIVORSHIP: An undivided interest in property, taken by two or more join tenants. The interest must be equal; occurring under the same conveyance, and beginning at the same time. Upon death of a join tenant, the interest passes to the surviving joint tenant or tenants, rather than to the heirs of the deceased. If a married couple acquires title as joint tenants with right of survivorship, they must specifically accept the join tenancy to avoid the presumption of community property.
TENANCY IN COMMON: A method of co-ownership where parties do not have survivorship rights and each owns a specific undivided interest in the entire title.
CORPORATION: Any group of people “incorporating” by following certain statutory procedures may take title to real property in the name of the corporation.
GENERAL PARTNERSHIP: Title may be taken in the name of a general partnership duly formed under the laws of the state of the formation of the partnership. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.
LIMITED PARTNERSHIP: A partnership formed by two or more persons under the laws of Arizona or another state and having one or more general partners and one or more limited partners. A certificate of limited partnership must be filed in the Office of the Secretary of State, a certified copy of which must be recorded.
While the above methods and definitions may seem bewildering, a careful review of the options and an assessment of your circumstances will enable you to make the right decision. If you are unsure you should consult with a real estate or tax attorney, and/or an accountant.
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