Real Estate: Holding Title in Arizona

Imagine you and your spouse own your home, and you choose to take title as community property. You are married many years, have several children, a few grandchildren, and then your spouse passes away. You are devastated, yet grateful for your family and home. But then, as the estate is being settled, you discover your spouse had a lover. To make it worse, the spouse left his or her half-interest in your home to the lover!

Sound impossible? Not in Arizona, nor in some other states. Laws governing how to hold title vary from state to state. And in Arizona, there are two ways to take title as community property. In the first example, either spouse can choose to will his or her half interest in the property to anyone they choose. It might be to their children, parents, friend or even a lover.

There is a second way to hold title as community property in Arizona, and it is called community property with right of survivorship. This would be the choice the imaginary widow/widower would have probably wanted. When holding title in this manner, the estate passes to the surviving spouse outside of probate.

When holding title in Arizona as community property, and community property with right of survivorship, both requires a valid marriage between the two parties, each spouse will hold an undivided one-half interest in the property, neither spouse can partition the property by selling his or her interest, and in both instances it requires a signature of both spouses before the property can be transferred or encumbered.

But, there is a big difference between the two forms of holding titles for married couples. With one the spouses can will away their half, and in the other, their half automatically goes to the remaining spouse.

Some couples, especially those who have children from previous marriages, may opt for the version of community property, where they can pass their half to their children. Yet, whenever making decisions on holding title, it is advised to seek council from your attorney. While your real estate agent and title company can give you information on ways to hold title, the intricacies of that decision and how it might impact your personal situation, may be better served with professional legal council.

Other ways to hold title in Arizona include joint tenancy with right of survivorship, and tenancy in common. In joint tenancy, each owner owns an equal share of the property. But, in Tenancy in Common, the different owners can own unequal shares. For example, one may own 25% of the property, and other owner can own 75%.

In all four manners of holding title, the owners own an "undivided interest". This means one owner can't come in and draw a line around what one might consider his or her share of the property. An owner can't say "that corner of the property is my 25%". It also means the widow/widower in our first example can't draw a line down the property, to denote which half belongs to the spouse's lover.