There’s more to owning property than simply knowing where to sign your name.

You can own investments several different ways. If you buy a mutual fund, for instance, you can own it in your own name, or jointly with one or more other people, or hold it as a trustee for the benefit of someone else.

In each case, the way you own an investment determines your rights as an owner, including whether you can sell the property or give it to someone else. Your parents, for example, could give property to you and your siblings in equal shares, allowing each of you the right to sell your shares separately. Or they could require that you all agree before any part of it could be sold.

Flexible ownership

Ownership can be changed, often relatively simply. If you want to make your spouse, your adult child, or some other person a joint owner of property that you now own alone, you can usually change the title with little hassle and rarely any charge. With a mutual fund account, for example, you write a letter of instruction to the custodian. With a stock, you arrange the change through your broker. In either case, you might have to get a signature guarantee from your bank.

With joint ownership, you and the other owner(s) have to agree before a change can be made. But if you agree, you can make whatever changes you want.

However, you should avoid acting too hastily on any change in ownership, especially during a period of stress or at a major turning point in your life. For example, lawyers often advise newly married people to keep assets they had before marriage in their own names at least for a period of time. If you live in a community property state, in fact, you may decide to hold premarital property in sole ownership no matter how long you’re married. Otherwise, you give up your right to own it exclusively in the future.

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Kinds of ownership

 Basically, there are four ways to own property, whether it’s real estate (land and buildings), stocks, bonds, mutual funds, bank accounts, or almost anything else:

Sole ownership  Joint tenants with rights of survivorship  Tenants by the entirety Tenants un common
Owners One person owns the property
and controls what happens to it
Two (or potentially more
than two) people own the
property equally
A married couple who own the
property together
Two or more people own a
share—often but not always an
equal share—of the property
Right to sell There are no limits on selling
it, giving it away, or leaving it
by will as long as you own the
property outright
One person can sell his or her
share, but usually only with the
consent of the other owner(s)
and only if the proceeds of the
sale are shared equally with
the other owner(s)
Neither can sell without the
other’s permission
Each owner can sell his or her
share independently and keep
the profit. The other owner(s)
have no right to inherit (though
they could), and they have no
control over a co-owner’s share
In a divorce Property purchased during a
marriage could be counted as
marital property that’s subject
to division
If the owners are married,
and they divorce, the property
is marital property that may
be subject to division
Spouses become tenants in
common, and either has the right
to sell his or her half without the
consent of the other
Property purchased during a
marriage could be counted as
marital property that’s subject
to division
At death Property can be left by will
or put into a trust as the
owner wishes
When one owner dies, that
share becomes the property of
the other owner(s). It can’t be
left by will to anyone else
When one spouse dies, the
other becomes the sole owner
of the property. It can’t be left by
will to anyone but the spouse
Property can be left by will
or put into a trust as the
owner wishes

You don’t always get it in writing

When you buy certain property, like a car or real estate, you get a title, or certificate of ownership, that names you as the owner. It must be signed over to the new owner when you sell. In fact, the process of finalizing ownership is often referred to as taking title. In the past, you also used to receive certificates when you bought stocks and bonds, which you had to safeguard and then sign and turn in when you wanted to sell. But when you buy securities today, ownership is recorded in book-entry form or held in the name of the brokerage firm. You can usually sell simply by giving instructions over the phone or online.

Aching joints

Joint ownership won’t always protect you from having the rug pulled out from under you, financially speaking. When you have joint checking or savings accounts, or any account that doesn’t require both signatures to transfer or withdraw money, either owner can take out every penny, perfectly legally.

Getting advice

If you’re married or involved in a long-term relationship, you should discuss ownership decisions with your lawyer and probably with your tax advisor.

Many married couples own all their investments, including their homes, jointly. There are good reasons for this, including the fact that it helps to establish financial equity between husband and wife and may prevent one partner — for whatever reason — from selling all the assets. But there are potential drawbacks to owning everything jointly, including protecting assets from estate taxes or claims from your or your spouse’s creditors.

Though you can’t prepare for every eventuality, your lawyer might advise you to limit joint ownership if one of you might be vulnerable to lawsuits because of your profession or other activities. Trying to shift ownership in the face of a legal threat usually doesn’t work.

When time counts

One caution:

There are times when a transfer of ownership might be challenged in court, such as in cases when you’re trying to protect certain assets or qualify for government assistance.

In those cases, transfers must occur by a specific date—sometimes as long as three years or more earlier—to be valid.

What Are The Types Of Property Ownership? by Inna Rosputnia

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