Ways to Take Title
Community Property: Community property is a method of co-ownership for married persons only. Ownership interests are equal, and both co-owners must join in transferring or encumbering the property. Upon the death of one spouse, the deceased spouse’s interest will pass by intestate succession or through a will.
Community Property With Right Of Survivorship: This is a method of co-ownership that allows a married couple to hold title as husband and wife while providing for succession outside of probate on the death of either spouse. Each spouse holds an undivided one-half interest in the estate. It requires signatures of both spouses’ to convey or encumber. Both halves of the community property are entitled to a “stepped up” tax basis as of the date of death.
Joint Tenancy With Right Of Survivorship: Joint tenancy is a method of co-ownership that gives title to the property to the last survivor. There is one title to the whole property, and ownership interests cannot be divided. Title can be acquired by any number of persons or a husband and wife. On a co-owners death, his or her interest ends and is transferred by operation of law to the survivor(s). The joint tenancy may be broken if a co-owner conveys his or her interest without the other(s) or if a creditor acquires the interest through an execution sale.
Tenancy In Common: This is a method of co-ownership where parties do not have survivorship rights and each owns a specific undivided interest in the entire title. Each co-owner has a separate title to his interest, and can transfer or encumber his or her interest without the other co-owners. Ownership can be divided into any number of interests, equal or unequal, and any number of persons and a husband and wife can acquire title. On a co-owner’s death, his or her interest passes by will or intestate succession. A co-owner’s interest can be sold through an execution sale and the creditor then becomes tenant in common.
Sole And Separate: This method of ownership is for a married person dealing with their sole and separate property. A husband or wife can acquire title as sole and separate if the property is owned by either spouse before marriage or acquired after marriage by gift, devise, descent or specific intent. If a married person acquires title as sole and separate property, his or her spouse must execute a disclaimer deed to avoid the presumption of community property. If you are divorced, the title company may request proof of your divorce to verify legality of this method of ownership.
Corporation: Title may be taken in the name of the corporation provided the corporation is duly formed and in good standing in the state of its incorporation.
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 partnership. A partnership is defined as a voluntary association of tow or more persons as co-owners in a business for profit.
Limited Partnership: A partnership formed by tow or more persons under the law of Arizona or another state and having one or more general 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.
Note: Arizona is a community property state. Property acquired by a husband and wife is presumed to be community property unless legally specified otherwise. Parties may choose to hold title in the name of a limited company or trust. Each method of taking title has certain significant legal and tax consequences. Therefore, you are encouraged to obtain advise from an attorney or other qualified professional.