Realtors: How Should Your Clients Take Title to Their Home?

HOW MANY TIMES HAS ONE OF YOUR CLIENTS ASKED YOU “HOW SHOULD I TAKE TITLE TO MY NEW HOME?”

As an estate planning attorney, navigating clients through this pivotal question becomes a crucial aspect of our service. A correctly titled property is not just a matter of legal compliance; it’s a strategic move to ensure the financial security and wishes of the property owners are honored.

Realtors play a pivotal role in not just finding the perfect home for clients but also in navigating the intricate pathways of home ownership. One question that frequently arises, yet is often underestimated in its complexity, is, “How should I take title to my new home?” This question extends beyond the closing of a deal and delves into the realms of legal compliance, financial security, and estate planning. As a realtor, equipping yourself with knowledge on this subject isn’t just adding another feather to your cap—it’s about becoming an indispensable resource to your clients.

Realtors: You have the opportunity to make sure that your clients have all the benefits of rightly titled property and they will definitely thank you for it.

WHY IS TITLING PROPERTY CORRECTLY SO IMPORTANT TO HOMEOWNERS?

The Importance of Correct Titling:

The foundation of estate planning is control. Homeowners want assurance that their wishes, especially regarding their property, will be respected and executed.

If Titled Incorrectly:

If titled incorrectly, the property owner cannot control what happens to the property after he dies; second, if titled incorrectly, the heirs can lose the property to creditors, the government, or even an ex-spouse; third, if titled incorrectly, the heirs will have to pay capital gain on the sale of the property.  

THREE COMMON WAYS TO HOLD TITLE 

JOINT TENANCY:  

The worst part about joint tenancy is the owner who dies first cannot control what happens to the property after his or death.  Joint Tenancy ensures that there will be a probate upon the death of the second joint tenant.  Finally, the surviving joint tenant will pay capital gain on one-half of the property after the death of one joint tenant.

COMMUNITY PROPERTY:  

Possibly the most common way for married couples to own property, Community Property causes half of the property owned as community property to be probated upon the first death and the whole property must be probated upon the second death.  Probate is not fun- it is time consuming and costly!  

COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP:  

Like joint tenancy, CPw/ROS is a he who dies last wins situation, because the surviving owner controls the disposition of the property on her death.

THE FOURTH AND BEST WAY TO OWN PROPERTY – A REVOCABLE LIVING TRUST:  

Realtors: Present this option as a comprehensive solution, offering control, protection, and tax efficiency. It’s an avenue to sidestep probate, maintain privacy, and ensure a seamless transfer of the estate.

The best way for your homeowners to own their property is in a revocable living trust.  

• A properly drafted and funded trust will avoid time consuming, expensive and public probate upon the first death and the second death.  
• A revocable living trust will make sure that the right people receive the property after the death of both owners and that it doesn’t go to creditors, predators, or future spouses.  
• Property received by the heirs can usually be sold free of any capital gain tax and can be protected from creditors and predators of the heirs.

Empowering Conversations with Knowledge:

Your role as a realtor is evolving. Clients are looking for more than property listings—they are seeking informed guidance. By understanding the implications of each title option, you can engage in deeper, more meaningful conversations with your clients, positioning yourself as a trusted advisor.

Revocable living trusts extend beyond financial savings, morphing into a protective shield for the property and its intended beneficiaries. In a world where creditors and predators lurk, having a well-structured trust is akin to building a fortress around the estate. It’s an assurance that the property will transition according to the explicit wishes of the owners.

The Realtor’s Advantage with Revocable Living Trusts:

Revocable living trusts stand out for their multifaceted benefits. Educate your clients about this option; explain how it enhances control, minimizes tax liabilities, and acts as a shield against third-party claims. When clients realize you’re not just about the sale but genuinely invested in their long-term welfare, your reputation and relationships will be solidified.

Conclusion:

In the competitive world of real estate, the realtors who stand out are those who offer value beyond the conventional services. Equip yourself with the knowledge of property titling, and transform each client interaction into an opportunity for empowerment. You’re not just helping clients buy a property—you’re guiding them to secure their legacy, and in doing so, you’re building your legacy as a realtor of distinction. Your informed advice on property titling won’t just close deals; it will open doors to enduring client relationships, referrals, and a reputation anchored in trust and expertise.