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Owning property is one of the biggest financial decisions you’ll make. Whether you’re purchasing a home, investing in real estate, or sharing ownership with someone else, how the title is structured can shape your rights and responsibilities. The way property is held affects everything from taxes to inheritance and even legal protections against creditors. While it may seem like a minor detail, choosing the right type of ownership can have long-term consequences. Understanding the differences can help you avoid complications down the road and ensure that your property interests are protected according to your needs and future plans.
Sole Ownership
Sole ownership means one person holds full rights to a property. This structure gives the owner complete control over decisions, including selling, refinancing, or transferring the property. It’s common for single individuals, business entities, or investors who prefer independent ownership.
While this setup offers simplicity, it also comes with risks. If the owner passes away without an estate plan, the property may go through probate, delaying distribution to heirs. Additionally, creditors can pursue the property to satisfy debts. If you own property alone, having a will or trust in place can help protect your interests and ensure a smooth transfer.
Joint Tenancy
Joint tenancy allows two or more people to own property together with equal rights. One of its defining features is the right of survivorship, meaning that if one owner passes away, their share automatically transfers to the surviving owner(s) without going through probate. This arrangement is often chosen by spouses, family members, or business partners who want to ensure a seamless transfer of ownership.
However, joint tenancy comes with limitations. Since each owner has equal control, major decisions—such as selling or refinancing—require unanimous agreement. Additionally, creditors of one owner may place liens on the property, which can affect the other owners. If one owner wants to sell their share, it can disrupt the arrangement. Before choosing joint tenancy, it’s important to consider the long-term implications for your co-owners and estate planning goals.
Tenancy by the Entirety
Tenancy by the entirety is a form of ownership available only to married couples. It treats both spouses as a single legal entity, meaning neither can sell or transfer their interest without the other’s consent. One major advantage is protection from creditors—if one spouse has debts, creditors generally cannot force the sale of the property to collect. Additionally, when one spouse passes away, the other automatically inherits full ownership without probate. If you’re married and purchasing property, this option can provide added security and peace of mind.
Community Property
Community property laws apply in a handful of states and affect how married couples own assets. Under this system, both spouses share equal ownership of any property acquired during the marriage, regardless of who purchased it. When one spouse passes away, their share can be transferred through a will or trust. Some states offer a community property with right of survivorship option, which allows the surviving spouse to inherit the property automatically. Massachusetts does not follow community property laws, so couples here typically choose joint ownership options instead.
Which Title Is Right for You?
The best way to hold title depends on your goals, relationships, and financial situation. If you own property alone, sole ownership keeps things simple but may require estate planning. Joint tenancy works well for shared ownership but comes with restrictions. Married couples may benefit from tenancy by the entirety for added protection. If you’re unsure which option fits your needs, we can help you evaluate your choices and ensure your property is titled in a way that supports your long-term plans.
Protect Your Property with the Right Title Choice
How you hold title to a property affects your rights, protections, and future plans. The right choice can help you avoid legal complications and ensure a smooth transfer of ownership when needed. At LaFountain & Wollman P.C., we assist property owners in understanding their options and making informed decisions. If you need guidance on property ownership or title changes, contact us today. We’re here to help you protect your interests and plan for the future.