Note: Arizona is a community property state. Property acquired by a husband and wife is presumed to be community property unless legally specified otherwise. Title may be held as “Sole and separate.” If a married person acquires title as sole and separate, his or her spouse must execute a disclaimer deed to avoid the presumption of community property. Parties may choose to hold title in the name of an entity, e.g., a corporation; a limited liability company; a partnership (general or limited); or a trust. Each method of taking title has certain significant legal and tax consequences. Therefore, you are encouraged to obtain advice from an attorney or other qualified professional.
COMMUNITY PROPERTY | COMMUNITY PROPERTY WITH THE RIGHT OF | JOINT TENANCY WITH THE RIGHT OF | TENANCY IN COMMON |
Requires a valid marriage between two persons. | Requires a valid marriage between two persons. | Parties need not be married; may be more than two joint tenants. | Parties need not be married; may be more than two tenants in common. |
Each spouse holds an undivided one-half interest in the estate. | Each spouse holds an undivided one-half interest in the estate. | Each joint tenant holds an equal and undivided interest in the estate, unity of interest. | Each tenant in common holds an undivided fractional interest in the estate. Can bedisproportionate, e.g., 20% and 80%; 60% and 40%; 20%, 20%, |
One spouse cannot partition the property by selling his or her interest. | One spouse cannot partition the property by selling his or her interest. | One joint tenant can partition the property by selling his or her joint interest. | Each tenant share can be conveyed, mortgaged or devised to a third party. |
Requires signatures of both spouses to convey or encumber. | Requires signatures of both spouses to convey or encumber. | Requires signatures of all joint tenants to convey or encumber the whole. | Requires signatures of all tenants to convey or encumber the whole. |
Each spouse can devise (will) one-half of the community property. | Estate passes to the surviving spouse outside of probate. | Estate passes to surviving joint tenants outside of probate. | Upon death the tenant’s proportionate share passes to his or her heirs by will or |
Upon death the estate of the decedent must be cleared through probate, affidavit or adjudication. | No court action required to clear title upon the first death. | No court action required to clear title upon the death of joint tenant(s). | Upon death the estate of the decedent must be cleared through probate, affidavit or adjudication. |
Both halves of the community property are entitled to a stepped up tax basis as of the date of death. | Both halves of the community property are entitled to a stepped up tax basis as of the date of death. | Deceased tenant(s) share is entitled to a stepped up tax basis as of the date of death. | Each share has its own tax basis. |
Contact: Lawyers Title Of Arizona for All Your Title Needs
Office: 623-979-6060 www.lawyerstitlearizona.com
The Shankman Team
Realizing Your Dream is Our Mission
28451 N Vistancia Blvd, Suite D-103 Peoria, AZ 85383
623-444-7939