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The Importance of Title in Real Estate
As an estate planning attorney, I have the privilege of educating many clients on areas ranging from charitable giving to the various types of trusts. In providing that education, I often run across areas where many clients share confusion on a particular issue. One of those areas is the titling of real estate (land and buildings). In an effort to better educate readers in that area, I offer the following five truths about real estate titling that you may or may not already know.
1. You receive a deed at the time you purchase real estate, not when you pay it off. This issue is often confused because the process is opposite with motor vehicles, where a person does not receive the title to their car until they have paid off the entire loan. With a house or a piece of land, however, the buyer receives the title at the time of the initial purchase of the property. There may be mortgages that give a bank or other creditor a lien on the property, but the buyer is the titled owner from the beginning. In other words, if someone asks for a copy of the deed to your house, you have it, or at least you had it until you accidentally threw it away!
2. Deeds are publicly recorded. If you are a person who cleaned out your basement and accidentally threw away the deed to your property sometime in the past, there is no need to worry. Deeds are recorded at the office of the register of deeds office for the county where the property is located, and you can get a copy of your deed for $20 or so with a trip to the courthouse.
3. The law assumes unmarried co-owners are tenants in common. While you may not understand the legal relevance of that first sentence, it is extremely consequential in the event of a death of an owner of a property based on the following example. If Dan and Don are co-owners of a piece of land and the nature of the co-ownership is not stated on the deed, the law says that Dan and Don are tenants in common. That means that if Dan dies, Don does not automatically become the sole owner of the land. Instead, Dan’s 50% interest in the land is transferred according to his will and probably has to go through the probate process, even if the will says that it goes to Don.
4. Joint tenancy means whoever lives longest gets the property. Using the example of Dan and Don above, if Dan and Don owned the same piece of land as joint tenants (which it must say on the deed) and Dan died, Don would become the sole owner of the property. This means that Dan’s share would not go to his wife or his children or his favorite charity, even if he said it should in his will or trust. Instead, Dan’s interest would die when he did and Don would become the sole owner. As you can see, this is very different from the result as tenants in common, so owners of real estate must be very careful and work with knowledgeable professionals to be sure the titling of any property is done in accordance with the owners’ wishes.
5. You can name a beneficiary for your real estate. Based on a relatively recent update to the law, Wisconsin landowners can now name an individual, a group of individuals or even a charity as the beneficiary of a property in the event of the owner’s death. This presents a great opportunity to efficiently transfer property, but also the possibility of a serious error based on incorrectly drafted documents, misunderstandings of the law, or lack of thoughtful planning.
As shown above, there are many nuances within the titling of real estate that make enormous changes to estate plans, whether the individuals involved understand it or not. For that reason and many more, it is always wise and worth the investment to make your estate plan with an experienced attorney so your wishes can be carried out efficiently and accurately.
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