Types of Ownership
Q. What are my options in how to take title to property?
A. The main types of estates in Washington are as follows:
- Tenancy for Years: This is another name for a lease. If you have a leasehold estate, you only own the right to use property for a specified period of time.
- Fee Simple: This is absolute ownership in its simplest form. If you own property in fee simple, you own the property outright and may dispose of it in any manner you desire. You may sell all or part of it, give it away, or bequeath it through a will or trust.
- Tenants in Common: This is a type of ownership in which you share ownership with others, but you retain the right to sell your portion without permission of the others. All of the owners have a share of the estate. If one of the owners dies, his portion can pass through to his heirs.
- Joint Tenants: This is probably the most common form of ownership, but it is not without possible problems. Joint tenants take ownership to property with the survivor taking full ownership at the first death. Therefore, a joint tenant cannot devise his or her share through a will or trust. A joint tenancy deed generally reads, “. . . to John Smith and Mary Smith as joint tenants with right of survivorship.”
If the deed does not mention joint tenancy or right of survivorship, it will be considered as tenants in common. When a joint tenant dies, the joint tenancy with respect to the owner dies. Two signatures are required of joint owners of certain types of property, such as stock, and upon incapacity of one party, a guardianship may be necessary.
- Tenancy by the Entireties: This is a form of joint tenancy between husband and wife. If a deed reads, “. . .to John Smith and Mary Smith, his wife,” a tenancy by entireties is created. Neither party can convey any property without the approval of the other, and each party is deemed to be a full owner. When one spouse dies, the “tenancy by entireties” ends and the new survivor has full ownership without ascertaining a new deed (by filing the death certificate of the deceased spouse). Upon divorce, the property reverts to tenants in common.
- Life Estate: This is a form of ownership limited by someone’s life. For example, “. . . to John Smith for life with remainder interest to Mary Smith.” In this example, John Smith would have a life estate in the property, and upon his death it would pass to Mary Smith automatically (upon death certificate). Another example would be “. . . to John Smith as long as Mary Smith shall live and then to Little John Smith, Jr.” In this example, John Smith may only keep the property as long as Mary is alive.