Have you thought about how you will take title when you buy a home?
If you’re like most buyers, you probably haven’t. Oftentimes, in all of the craziness of buying a home, it’s probably not even something that has crossed your mind.
In this post, we’ll take a quick look at some of the most common ways to take title in Tennessee.
What It Means: Tenants in common means that each owner has an undivided interest in the property. But, the ownership interest doesn’t have to be equal. For example, one owner could own 25% while another owner could own 75%.
How It Works: Since each owner has their own portion of interest, an owner can convey or gift his ownership without the consent of the other owners.
When an owner passes away, that portion of ownership will pass along to the respective heirs. It is important to note, though, that when one owner passes away it doesn’t change the ownership interest of any of the owners.
Who Typically Takes Title This Way: In most cases, tenants in common is used by unmarried individuals.
What It Means: Like tenants in common, joint tenants have an undivided interest in the property. But, unlike tenants in common, each owner owns an equal share of the property.
How It Works: The biggest difference between joint tenants with right of survivorship and tenants in common is how the property is handled in when one owner passes away. Joint tenants offers the right of survivorship. When one owner passes away, the deceased owner’s share automatically goes to the other owner. Nothing has to go to probate or be conveyed in order for this to happen.
Who Typically Takes Title This Way: Typically, joint tenants right of survivorship is used by unmarried individuals (i.e. family members or unmarried couples).
What It Means: Tenants by entirety is a form of ownership that is only available to those who are married.
How It Works: Tenants by entirety is very similar to joint tenants with the right of survivorship. Like joint tenants, if one spouse passes away, the ownership interest automatically conveyed to the surviving spouse.
There is one major difference, however, involving creditor protection. Creditors of one spouse are not able to attach and sell the interest of the debtor spouse. In order to that, the creditor must be a creditor of both spouses or have the permission of the non-debtor spouse. This is an added protection to this type of ownership, which is why taking title this way can be so appealing.
Who Typically Takes Title This Way: Tenants by entirety is only available to married individuals.
Life has a way of changing. Maybe you met a spouse since you bought a property or are getting older and want to include your kids on the deed, regardless, it’s relatively simple to change how you originally took title.
In most cases, a Quit Claim Deed can be prepared to update how you would like to be in title. If you have questions or concerns of how you took title, please do not hesitate to contact us. Title Group of Tennessee does offer the preparation of Quit Claim Deeds as one of our many services. We’d be more than happy to help you out in any way we can.
These are just some of the basic ways to take title in Tennessee. There are other options to take title, so if we didn’t cover an option that fits your needs, don’t hesitate to contact us and we can discuss your other options.
Are you in the process of buying or selling a home in the Knoxville area? Title Group would love to assist you in any way possible. You can reach us at 865-392-5801 or via email at [email protected].
Title Group of Tennessee is a full-service Knoxville title company. We specialize in Knox, Sevier, Loudon, Blount, Jefferson, and surrounding counties. Title Group of Tennessee is ALTA Best Practices Certified since September 30, 2015.