Episode 036 - You Did What With Your Ownership?
What happens when you pull back the curtain of ownership? Probably nothing. Clients buy homes every day. But the legal form of ownership is this “thing” that happens behind the scenes and no one notices…until…they do!
Legal ownership is tough to comprehend--and usually unimportant--until problems start to show up, like divorce, death, and taxes. Agents can better serve their clients by informing them of potential legal and taxation issues tied to the type of ownership of their real estate.
Take care to stay in your lane, unless you are an attorney or accountant. However, it's vital to the client since ownership is something to pay attention to. In this episode, we'll talk about different forms of real estate ownership and the issues that each can bring.
SHOW NOTES
- 00:35 – Is B hopped up on caffeine? Buckle up buckaroo!
- 01:25 – Getting a little technical today from pre-licensing. Forms of ownership.
- 02:08 – Song of the Episode: The Who, “Who Are You”.
- 04:00 – Ownership means a lot to our clients. Emotional, psychological, financial and legal parts.
- 05:14 – Agents should have conversations with their clients. Do not act as an attorney or accountant, but mention it to them.
- 06:04 – We deal with this all the time. Example of divorcing couple and ex-spouse passed.
- 07:28 – Definitions: 4 types of ownership: Severalty; Co-Ownership Types: Tenant in Common, Joint Tenancy, and Tenancy by the Entirety.
- 08:43 – Other forms: legal life estates, trusts, business entity ownership.
- 08:57 – Tenants in Common. Two key pieces: Separate interest, owners can do what they want with their interest in the property.
- 10:25 – Ability to split ownership into any percentage. Cate eats Twix bars. Debate over the right or left side.
- 11:35 – If client does not decide how to split the percentage ownership, equal ownership is automatically set.
- 11:55 – Cate: you do this with the title company. Communicate to the title company and the deed is drafted.
- 12:25 – Cate’s Side Note Tangent: Working with investors and experiences. Cate has fleas. Cate is a belly dancer apparently. Dealing with squatters. Have not found a dead body…yet.
- 16:22 – Email from Sally in San Diego: Please get to joint tenancy.
- 16:50 – Joint Tenancy w/ Right of Survivorship: the last person living gets full ownership of the property.
- 17:38 – Cate: as people pass, the interest is absorbed by the remaining owners.
- 18:04 – Joint tenancy does not allow owners to take an unequal percentage share. Owners must have an equal percentage ownership.
- 18:59 – Anyone can use joint tenancy but be careful who you choose as a co-owner. If you pass, your co-owner gets all the property. Is that what you want?
- 19:20 – Cate: Parents and a child own property might be a way to eliminate probate but be careful of other issues such as taxes.
- 19:48 – The right answer is to what form of ownership is based upon an informed client’s decision. They each have their pros and cons. Make sure your clients know to choose wisely.
- 20:30 – Bobby from Walla Walla Washington has a question: please tell us about Tenancy by the Entirety.
- 20:57 – Similar to joint tenancy but reserved exclusively for married couples. Some states recognize marriage as a legal union of two people into one. Two physical humans, but one legal entity that is inseparable.
- 21:39 – Cate’s example from earlier. Ownership shifted from Tenancy by the Entirety to Tenants in Common.
- 22:44 – Get advice from attorneys and accountants. There are legal concerns but also taxation and liability concerns with ownership.
- 23:54 – Probate issues can be affected by the type of ownership. Trusts and wills are a part of this.
- 24:22 – Cate: talk to your clients before closing about this topic.
- 25:25 – Lamont from Ontario, Canada: is there a quote of the week?
- 26:20 – Quote of the Episode: “Be intentional in who you are. Going through life, unaware of what makes you special serves no one.” Serve yourself and your clients.
- 27:07 – No one asking about the closing. Remember the different forms of ownership with their own pros and cons. What might be true for one client may not be true for another. Bring this up to your client and recommend they seek guidance on what to choose.
- 27:45 – Helping your clients will make you shine and become a legendary agent that goes beyond what other agents do.
SHOW LINKS
BETWEEN THE LINES LINKS
Email
brian@brianclee.com
cate@craftsmanrg.com
Web
brianclee.com
catelee.com
realestatebetweenthelines.com
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https://www.facebook.com/groups/realestatebetweenthelines/
https://www.facebook.com/Brian-C-Lee-111822417027919/?
YouTube
https://www.youtube.com/channel/UCcv4dHU39-b5_QVVCIhbcBA?
