If you’re in the process of evaluating your estate it is important to know the ways you can own property. When you are creating your asset list, it will be very helpful to your family to state how the property is owned and save them the leg work.
There are two types of property: real property and personal property. Real property is the term used to describe real estate—land and the buildings on it. Personal property is anything that is not real property. Personal property includes everything from your bank accounts to the diamond necklace you got on your 16th birthday.
Real Property can be owned a few different ways. Depending on the type of ownership, you may be able to leave the property to someone in your will.
• Sole owner. This is the most basic type of ownership. You are the only owner and do not have any co-owners. Anything you are sole owner of, you can also give away. Therefore, if you are the sole owner, you can list the property in your will.
• Joint tenancy with right of survivorship. This type of ownership can exist between two or more people, including a husband and wife. If one owner dies, the other (s) automatically inherits his or her share of the property and it passes to him or her outside the will. If you own property by joint tenancy, you cannot give away your share of the property under your will.
• Tenancy in common. This type of ownership can exist between two or more people, including a husband and wife. With this type of ownership, your co-owners have no claim to your share of the property. In most cases, you can use your will to give your portion to anyone you want.
• Community Property. This is another type of concurrent ownership; however, it can only exist between spouses. If you and your spouse acquired property while married in one of the community property states (see the Planning a Will guide), that property may be governed by the community property laws of that particular state. While Colorado is not a community property state, Colorado does recognize community property “imported” into Colorado. For example, if a married couple bought a house while living in California then sold the house and used the sale proceeds to buy a house in Colorado, that couple’s Colorado house may be community property. Because it is often beneficial to maintain the community nature of community property assets brought into Colorado, if you think you may have community property, it is a good idea to consult an estate planning attorney to evaluate your situation and take steps to protect your community property assets.
You can often find out what type of ownership you have by checking the ownership papers for the property you own. It is important to note the type of ownership on your asset check list. You should also include the estimated value of your portion of each item. If the item is owned in joint tenancy, mark on your list that the item will pass outside your will.
For more information about writing your will and property ownership, check out “Planning a Will in Colorado”, a Bradford Publishing’s legal series