What are some of the more common forms of property and asset ownership?

There are a variety of ways that you can own, or hold title to, property and assets:

• Sole Ownership: the property or asset is owned entirely by one person
• Tenants in Common: generally, a form of co-ownership in which real estate is owned in the names of 2 or more persons as “tenants in common”. Each co-owner owns a proportionate interest in the real estate, and such interests do not have to be equal.  Upon the death of a co-owner, his or her proportionate interest will be disposed of by his Will, or if he does not have a valid Will in effect, by the state statute that applies when a person dies without having a valid Will in effect.  In either of those cases, the deceased co-owner’s proportionate interest in the real estate will likely be subject to probate in the state where the real estate is located.  The deceased co-owner’s beneficiaries under a Will, or heirs if there is no Will, will then become the new owners of the decedent’s proportionate interest in the real estate.  As a result, they will also become new co-owners along with all of the other existing co-owners.
• Joint Tenancy: another form of co-ownership in which the property or asset is owned in the names of 2 or more persons as “joint tenants with right of survivorship”. Each co-owner owns an equal share of the property or asset.  Upon the death of a co-owner, his or her equal share automatically becomes owned by the surviving co-owner, or, if there are 2 or more surviving co-owners, equally by the surviving co-owners.  If there are 1 or more co-owners who survive the deceased co-owner, then the disposition of the deceased co-owner’s “share” of the real estate is not controlled by his or her Will or Living Trust, is not controlled by the state statute that applies when a person dies without having a valid Will in effect, and is not subject to probate upon the deceased co-owner’s death.
• Tenancy by the Entireties: in Illinois, a husband and wife may own their principal residence as “tenants by the entirety”. Again, this is another form of co-ownership that is very similar to Joint Tenancy.  However, unlike real estate held in joint tenancy with right of survivorship, there are 2 primary differences: (a) neither spouse, acting alone, may do anything that affects the title of the residence—i.e., any legal action affecting the title requires the signatures of both spouses; and (b) if a creditor obtains a judgment against one of the spouses, the creditor cannot foreclose on the residence, force it to be sold, and then reach the debtor-spouse’s one-half share of the net sales proceeds to satisfy the judgment.
• Community Property: Nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and nearby Wisconsin) have community property laws. In addition, Alaska allows its residents to opt-in to its community property laws.  Except for gifts or inheritances, these laws generally provide that property or assets acquired by either spouse during a marriage are owned equally by both spouses.
• Trust: by signing an appropriate Deed, or other transfer document, you may transfer the title of property or assets to the Trustee(s) of your Living Trust. Thereafter, if you have retained the right to revoke your Living Trust, you will still be able to sell, mortgage or otherwise deal with the real estate or asset as you could before the transfer.  However, since the real estate or asset is held in a Living Trust, it will not be subject to probate in the event you become incapacitated, or upon your death.  After you die, the successor Trustee of your Living Trust will dispose of or manage all Living Trust property and assets pursuant to the instructions you have included in the Living Trust agreement.