Featured News 2012 Forms of Ownership and Your House Deed

Forms of Ownership and Your House Deed

You have taken a step towards achieving the American dream; you now own a home! This exciting accomplishment is one of life's greatest joys. It takes years of renting, saving, planning and deciding to settle on the perfect home. Now that you have the keys, it is time to zone in on the legal concerns that come with being a homeowner. Once you get your house deed, it is imperative that you check it over. Look to see how your ownership is described on the deed. The wording of this document is essential to any battles you may need to face in the future.

Your house deed should describe the boundaries of your property, as well as the exact location of the home. Most deeds do not include actual descriptions of the structures on this property, but are more concerned with the actual property lines. If you are concerned about the boundaries of your land, you should talk things out with your surrounding neighbors, or hire a surveyor to help set things straight. It is essential that you are fully aware of where your property starts and ends in order to avoid conflict with others.

Your house deed will also outline a form of ownership. According to the American Bar Association, this deals with how long your title is valid. The most common form of ownership is called a "fee simple." In this form, the title is essentially valid forever. The homeowners have the right to own, rent, remodel, transfer, or sell the property at their whim. They can also put certain limits on how the property is dealt with after their passing. The term "fee simple" comes from England, where a landholder would sell an estate called a fee to a faithful subject.

People with fee simple can bequeath their house to another in the event of death. For example, if a husband wants his wife to inherit the house in the event of his passing, then he can determine that on the deed. There can even be a third party outlined, such as an heir wife who would then allow the children to inherit the property. People used to outline this in the house deed to avoid state taxes, but now there is no need because marital tax deductions protect property bequeathed to another spouse from state taxes. People will also use this form of ownership to retain their homestead exemption without having to constrain their property in probate when the die. They may want to give the title to a descendant who may qualify for better financing.

Another traditional form of ownership is what was once called a "life estate." Under the terms of life estate, the property is reverted back to the original owner if the subject passes away. This is similar to an ownership method called an "estate for years," which relinquishes the title to a former owner at some determined time. These ownership methods restrict the owner's ability to sell the property. Because the title deed is no longer valid when the homeowner dies, no one wants to purchase the home.

The American Bar Association suggests that if you want to, for example, give your home to an elderly parent until he or she dies and then bequeath it to your children, then you need to outline this in a trust. You can also provide these wishes in your will, without getting the house deed involved. That way, you are not tampering with the ability to sell the property in the future. If you are having trouble decided how to outline and work through your new housing deed, you should contact a real estate attorney for help. A learned real estate lawyer can give you the insight you need in order to make a wise decision and choose the best form of ownership for you, your family, and the future.

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