The first question that a title company will ask the buyer when opening escrow on the purchase of a property is: “How do you plan to take title?” The answer will depend on your own particular unique set of circumstances and there are advantages and limitations to the different options available to you.
It’s important to note that neither the title company nor your Realtor can advise you on how to take title. They can simply tell you what the options are. If you require more input on the subject, it’s best to speak with an attorney.
Sole ownership is for a single man or woman who is not married, a legally divorced man or woman, or a married man or woman taking property sole and separate. In the case of a married man or woman electing sole and separate title, the spouse has to provide written consent that they are relinquishing all rights in the interest of the property.
Community Property provides the husband and wife a one-half undivided interest in the property. In the state of Arizona, during the course of a marriage, all property acquired (even if paid for by only one of the spouses) is equally owned by both unless a written action to dispose of their interest has been formally documented. However, a spouse has the right to acquire property through inheritance and gift without property interest by the other spouse.
Community property with right of survivorship allows, upon the death of one spouse, his/her share to pass directly to the other spouse without going through probate .
Joint Tenancy with Rights of Survivorship is a a form of title where individuals have equal interests by two or more persons. In the event of death of one of the joint tenants, the deceased tenant’s interest is transferred to the surviving tenants.
Tenancy in Common is similar to Joint Tenancy where the co-owners have undivided interests; however, they have no right of survivorship. These interests do not have to be equal, and upon death of an owner their interest would go to their heirs.
Another option of title to real property in Arizona is in the formation of a Trust. Trusts are typically designed by attorneys and are outside expertise of a real estate professional.
With so many out-of-state buyers attracted to Arizona real estate, it is highly recommend that you seek professional counsel from a tax attorney or CPA to determine the legal and tax benefits/consequences of your election of title.