Sedona Arizona Submarine Rock

  

Holding Title To Real Property in Arizona

 

There are several ways in which persons can take title to their property in Arizona, which are explained below. Arizona is a “Community Property” state and you should consult an attorney, accountant or other professional before deciding how you want to take title. You should inform your escrow officer and lender as soon as possible of how you wish to take title to your home and exactly how your name(s) will appear on all documents. This allows them to prepare all documents correctly. (Changes later, such as adding or deleting an initial in your name, can delay your closing.) The descriptions below are taken from a Stewart Title and Trust brochure

Community Property:

Arizona is a community property state. The presumption exists that when a legally married couple acquires title to real property, unless otherwise stated and accepted on the deed, they are acquiring title as community property. It is generally accepted that neither of the parties may deed their interest without the other joining in on the conveyance. While we presume that all property acquired by a legally married person during the marriage is community property, this is not always true. If it can be established that a married person acquired title by gift, inheritance or by the investment of separate funds, the community property presumption may be overcome.

Without right of survivorship:
Upon the death of either spouse, the survivor owns an undivided one-half interest in the property and the remaining one-half interest of the decedent will pass under his/her will as directed. In the absence of a will, the property will pass under the laws of intestate succession. (This means state law will determine who inherits the property) One disadvantage to this type of ownership is that upon death of one of the parties, the estate must be probated.

With right of survivorship:
Upon the death of either spouse, the survivor must record a certified copy of the death certificate in the county where the property is located. This will reflect of record that the survivor is the sole owner of the property. The right of survivorship will supersede any will that provides that the property be left to someone other than the survivor. The advantage to this type of ownership is that you avoid probate and both the deceased and the survivor have a stepped up tax basis.

Joint Tenants with Right of Survivorship:
It is possible for two or more people, married or not, to acquire property in joint tenancy with right of survivorship. Each person is presumed to have an equal interest in the property. Under this method of holding title, when one of the joint tenants dies, his/her share is automatically transferred to the remaining joint tenants upon the recordation of a certified copy of the death certificate in the county where the real property is located. This type of ownership is stated on the deed and accepted by the grantees. This will also supersede any will that might bequeath the property to someone other than the surviving joint tenants. Probate is avoided with this type of ownership. The conveyance of one of the joint tenants without the other(s) will break the joint tenancy.

Tenancy in Common:
In this form of ownership, two or more people can hold title in various percentages or fractions of the whole. Since there is no right of survivorship, a tenant may bequeath his/her fractional share via a will. Any tenant may dispose of his/her interest in the property at any time. If the deed does not state percentage or fractional interests, it is presumed that it is an equal division between the grantees.

If the grantees are not married, it is not necessary to state that the grantees are taking title as tenants in common and the grantee need not sign the deed. However, if a husband and wife are included as a grantee, the deed must so state and they must sign the deed accepting the tenancy in common. This will cancel the community property interest between them.

Sole and Separate Property:
When a legally married person wants to acquire real property without his/her spouse having any right, title or interest in the property, it is said to be sole and separate property. Because of the community property laws in Arizona, one spouse must execute and record a disclaimer or quit claim deed to the other spouse to eliminate the community property interest. Property acquired by a person when unmarried remains that person’s sole and separate property after marriage without the spouse signing a disclaimer or quit claim deed, with certain exceptions.

Because prior marriages, divorces and the size of your estate can affect the way you wish to take title, you should consult your tax advisor or attorney for assistance.

THIS INFORMATION IS BELIEVED TO BE RELIABLE AND IS FURNISHED AS A COURTESY TO YOU.
STEWART TITLE & TRUST ASSUMES NO LIABILITY IN CONNECTION WITH THE ABOVE
INFORMATION NOR ITS RELIANCE THEREON. WE SUGGEST YOU CONTACT YOUR TAX ADVISOR OR ATTORNEY FOR ADVICE REGARDING A SPECIFIC MANNER OF HOLDING TITLE AND THE TAX CONSEQUENCES THEREOF.

Stewart Title and Trust-Sedona Branch
1725 West SR 89A Suite 1, Sedona, AZ 86336
Phone: (928) 282-0154 • Fax: (928) 204-6406

This document is intended for information purposes only. Each particular method of taking title has certain legal and tax consequences, thus you are encouraged to obtain advice from your Attorney and/or Certified Public Accountant to determine which way is best for you.