YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
Last month I talked about a transaction in which a property owned since the 1950s by the same family was transferred willy nilly between family members, leaving us scratching our heads to figure out who actually owns the property.
This month, I’d like to address family ownership transfers and refer back to my March 2018 Newsblog. These questions never get old and are still applicable today:
QUESTION:
My sister and I hold title ownership on a rental as “Joint Tenants”. She wants to transfer her share to her Living Trust. Here are my questions:
- Do I have to sign a quitclaim and /or grant deed to end the Joint Tenancy?
- Can my sister quitclaim her interest to her Living Trust and then we hold title as Tenants in Common with our own separate interests?
- Can I as an individual hold title as Joint Tenants with a Living Trust or a Limited Liability Company – an LLC?
ANSWER:
First and foremost, as an Escrow Officer, we are not attorneys and cannot give you legal advice. However, we can answer your questions based on years of accumulated experience in the industry. Please consult with your own legal counsel before you do anything..
Question #1 – Your Joint Tenant ownership can be turned into a “Tenants in Common” ownership simply with your sister deeding her interest into her Trust. Your signature is not actually needed. This “breaks” the Joint Tenant ownership that you originally had.
Question #2 – However, in the scenario above, the percentage interest owned between the two of you as Tenants in Common will be considered as 50/50 between you and your sister’s Trust. If you and your sister own different percentage interests, then, in order to confirm and set your interests correctly, it is best that you and your sister both sign the quitclaim deed to you and your sister’s Trust, and specify on it who owns how much percentage interest as Tenants in Common.
Question #3 – An individual “John Doe” should not own property with an entity, whether it is ABC LLC or XYZ Trust, as “Joint Tenants”. Here is the explanation of why not: Owning as Joint Tenant means that if one dies, the other inherits the interest automatically, no Will, no Probate. An individual can die, but a Trust or an LLC does not “die”; it can continue on forever. So if John Doe passes away his interest would automatically go to ABC LLC or XYZ Trust, and there would be no opportunity to let John Doe’s heirs inherit his interest. Is this what you really want?
EDUCATIONAL MOMENT:
Get legal counsel! I can’t emphasize this enough. Everyone’s financial status is different. Go to an attorney to set up the proper way you should hold your assets. Please do not use AI or the Internet as your counsel. In particular, this presentation is only for your reference, answering questions that come in to us and we always qualify our answers by stating that you must consult with your own legal counsel.
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~ Video of the Month ~
The Benefits of Walking
(10 minute video; important part starts at 7:22 and the FIT formula)
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~ (A Few) Quotes of the Month ~
A lot less people would buy a lottery ticket if the rule was, “Pick a number between 1 and 300 million. If you guess right, you win.”
Some of my friends exercise every day. Meanwhile, I am watching a show I don’t like because the remote fell on the floor.
For those of you that don’t want Alexa listening in on your conversation they are making a male version….it doesn’t listen to anything.
I just got a present labeled, “From Mom and Dad,” and you know damn well Dad has no idea what’s inside.
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My YouTube Offering for the Month
Minimize your closing costs!
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
Escrow is my FOREMOST language!
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com