Two or more persons may hold title to real property as joint tenants with the right of survivorship. In the past it was required that all joint tenants share the four unities of time, title, interest and possession. As of July 20, 1996, the Arizona legislature effectively abolished the requirement of the “straw deed” and the necessity of joint tenants to all take their interest at the same time. The advantage of joint tenancy is that upon death of one of the joint tenants, their interest is transferred outside probate to the surviving joint tenant(s). Evidence of the intent of a married couple to hold title to real property as joint tenants with right of survivorship must be in writing so as to avoid the presumption of community property.
Two or more persons may hold title to real property as tenants in common. In Arizona, married couples must reject community property and specifically take title as tenants in common. Each owner has a distinct and proportionate interest without the right of survivorship. The only unity involve is possession. Their undivided interest need not be equal but in the aggregate cannot exceed 100% of the ownership interest. A tenant in common may transfer his undivided interest without destroying the co-tenancy estate.
Only persons married to each other may own real property as community property. Each spouse owns an undivided one-half interest in their community property. Each spouse may provide by will for the disposition of his or her community interest in the community real property. However, Arizona community property law requires both spouses to join in a conveyance or encumbrance of community real property. Property acquired by a spouse during marriage is presumed to be community property except that property acquired by gift, device or descent. A married couple seeking to hold title to real property located in Arizona in a form other than community property may do so by renouncing the community property form and specifically accepting another form of co-tenancy.
Only persons married to each other may take title as community property with the right of survivorship. One spouse is entitled to the whole of the property upon the death of the other and both halves of the community property receive a new tax basis equal to the fair market value as of the date of death. Evidence of the intent of a married couple to hold title to real property as community property with the right of survivorship must be in writing in order to avoid the presumption of community property. When parties that hold property as community property with the right of survivorship dissolve or annul their marriage, the property converts to tenancy in common. Sole And Separate Real property owned by a spouse before marriage or any acquired after marriage by gift, descent or specific intent. If a married person acquires title as sole and separate property, his/her spouse must execute a disclaimer deed.
Title may be taken in the name of a general partnership duty formed under the laws of the state of Arizona or the state of the formation of the partnership. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.
A partnership formed by two or more persons under the laws of Arizona, or another state, and having one or more general partners and one or more limited partners. A certificate of limited partnership must be filed in the Office of the Secretary of State, a certified copy of which must be recorded. Corporation Title may be taken in the name of a corporation provided that the corporation is duly formed and in good standing in the state of its incorporation.
The Beneficiary Deed, touted as the best innovation in conveying property in quite some time, is the latest kid on the block when it comes to how to deal with real estate in Arizona. It is more than just a way to hold title to real estate. It is promoted as an estate-planning tool for estates large and small. The owner of real estate may record a deed in the county in which the property is located in order to transfer title to another upon the owner’s death. The theory behind Section 33-405 of the Arizona Revised Statutes is to create a transfer-at-death type of grant to a third party without the need for special administration at the time of death. It is very flexible about who can grant and who can receive. There can be more than one owner and more than one beneficiary and the grant to the beneficiary can be held in any form permitted by law (i.e., joint tenancy with the right of survivorship, tenants in common, etc.).
Realtors cannot advise buyers the best way for them individually to take title.
This is a decision the buyer should discuss with their attorney, and or, tax adviser. The information above is merely provided as reference material. If you need tax or legal resources to help you, let us know and we will be happy to provide you with some contact names of tax and/or legal professionals.