ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Ownership Options

What form of ownership is best for a home?

If more than one person is buying the home, ownership must be declared in one of several ways. Generally, married couples or other co-owners with equal interests in the property prefer to hold title as joint tenants with right of survivorship. This form of ownership enables one person to own the entire property in the event of the other person's death. At the time of a subsequent sale, the surviving person will need to present a death certificate to the closing agent. Some states also permit married couples to own as tenants by the entirety provided that the home is their principal residence. This form of ownership also provides a right of survivorship, and in addition provides some protection to the parties against losing the home to a creditor of one spouse.

Married or unrelated people may also own property with separate and equal or unequal interests as tenants in common or as a business type of entity (such as a limited liability company or partnership). There may be other forms of ownership depending on where you live, such as land trusts. The option that is best for you will depend on a variety of factors, such as your estate tax situation and provisions you may want to make for children, stepchildren, or other relatives. The deed creates the form of ownership, so buyers will want to make this decision before closing. Chapter 5, "Home Ownership," provides more detailed information on these and other ownership options. Be sure to consult a lawyer about the various advantages and disadvantages of different types of ownership so that you can make an informed decision about the form of ownership that is best for you.