Your Guide to DeLand Real Estate & Volusia County Properties

HOLDING TITLE

Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).

The following information is supplied for informational purposes and should not be relied upon as legal definitions.

Buying Alone

• Sole Ownership
• A single individual who has not been legally married.
• An unmarried individual who was married and is now legally divorced.
• A married individual who wishes to acquire title in his or her name alone. At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.

• Living Trust
  A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate. The individual transfers ownership of his or her property and assets into the trust.

Buying with Others

• Tenancy in Common
  Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
• Who can take title? Any number of individuals.
• Ownership Division: Any number of interests, equal or unequal.
• Who holds title? A separate legal title to his undivided interest is held by each co-owner.
• Possession: Equal right of possession.

• Joint Tenancy
  Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
• Who can take title? Any number of individuals.
• Ownership Division: Interests cannot be divided.
• Who holds title? There is only one title to the whole property.
• Possession: Equal right of possession.

• Community Property
  Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
• Who can take title? Only a husband and wife.
• Ownership Division: Interests are equal.
• Who holds title? Similar to title being in a partnership, title is held in "community."
• Possession: Equal right of possession.

Additional Ways to Hold Title

• Corporation
  A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.

• A Partnership
  A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.

• A Trust
  A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.

 More About Living Trusts

Created while you are alive, a revocable living trust lets you control the distribution of your estate. Ownership of your property and assets is transferred into the trust. You can serve as trustee or you can appoint another to serve as trustee. If you serve as trustee, you must appoint a successor to serve as trustee upon your death.

Properly drafted and executed, a revocable living trust can avoid probate and delays as the trust owns the assets not the deceased.  Consult with your attorney and/or CPA before deciding if a revocable living trust is the right choice for you.

Advantages to a Living Trust Holding Title

• A husband and wife can establish a joint revocable living trust.
   
• While the trustor serves as a trustee or a co-trustee, a separate tax return is not required for the trust.
   
• The revocable living trust allows the trustee to buy, sell and finance assets just as before.
   
• In the event of incapacitation, management of the living trust passes to the successor trustee without the necessity of a court-appointed conservator.
   
• The living trust can be cancelled or changed at any time before death or incapacitation.
   
• Probate - including multi-state probate - is avoided when assets are held in a living trust. (Often probate takes 9 to 12 months.)
   
• Privacy. When a decedent dies with a living trust, the provisions of that trust usually do not become public.
   
• Litigation is discouraged by a living trust.
   
• A married couple with a living trust can reduce or eliminate federal estate taxes by setting up an Exemption Trust. While both are alive the assets remain in the revocable living trust. Upon the death of a spouse, the trust is split into two trusts: the survivors trust and an exemption trust. (For tax purposes, the surviving spouse and the exemption trust are two separate taxpayers.)

Disadvantages of a Living Trust

• A living trust will cost more to set-up than an estate plan with only a will.
   
• A trust agreement with a new will must be set-up.
   
• Transferring assets into the living trust will require paperwork and incur costs not encountered with a less elaborate estate plan.
   
• Handling an Exemption Trust may require extra effort from the surviving spouse.
   
• Some lenders may require property held in a living trust be removed from the living trust to refinance the property.