When you own property in Maryland or the District of Columbia, there are multiple ways you may hold title. The way you hold title depends on whether you own property independently, own it with someone else, or own it as a business. Different titles come with different tax burdens and benefits, so it’s important to discuss this with a real estate attorney when buying property.
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This type of title is reserved for when one person owns a piece of real estate. Even if the individual in question is married, the person named on the title is the only one able to make decisions regarding it. This is something to keep in mind if you are the sole owner of real estate, as you’ll want to name someone in your estate planning who can care for the property if you become incapacitated.
Joint tenancy allows two people to share ownership of a piece of property. It maintains the right of survivorship for non-married owners. It’s important to note that there is a presumption against joint tenancy in Maryland, so if you want to go this route, you will need it detailed in the deed to the home.
For a home to be held in joint tenancy, there may be unity of interest, possession, time, and title. This means that all owners have an equal interest in the property, equal rights to own the property, interests that vest at the same time, and interests that come from the same deed. If one party wants to take action on the home—sell or refinance, for example—both parties must agree to it. Additionally, if creditors come after one owner, every owner’s share of the home is at risk
Tenants by the Entirety
Tenants by the entirety or entireties is a type of ownership used for married couples. Parties maintain the right of survivorship, and individual interests cannot be partitioned. One of the main benefits of this type of title is that the property is immune from the creditors of one party. If the owners divorce, the property becomes a tenancy in common.
Tenants in Common
This type of ownership allows each party to own their share of the property individually. There is no right of survivorship, so if one owner dies, their share is distributed according to their will. Shares may be equal or unequal. In the state of Maryland, the property is assumed to be a tenancy by the entirety if it is owned by a married couple and assumed to be a tenancy in common if the owners are not married. Since ownership is held individually, each party can sell, refinance, or use the property as collateral as they choose.
When a property is placed in a trust, the trust is considered its owner. The property is maintained by a named trustee, which may or may not be the original owner of a home. In a revocable trust, the previous owner of the home may remain in control of the property until they pass, at which point a new trustee steps in. In an irrevocable trust, the trustee must be someone other than the person who created the trust.
This type of ownership permits a state-registered corporate business entity to own a property. The ownership is separate from the people who own the company, so the property is truly owned by the business and not the people running it. Under Maryland law, several types of business entities can own real estate.
If you’re planning on buying or selling property, it’s important to talk about your next steps with an attorney. Doing so ensures that you know your rights and the risks of the type of ownership you choose.
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As you prepare for a property sale or purchase in Maryland or Washington DC, make sure you have an experienced real estate attorney by your side. Call Evans Law at 410-626-6009 or to set up a consultation.