Will the Title on Your Deed Protect Your Home?

Many people have wills and trusts which can secure their assets after they’re gone. Fewer, however, think about asset protection over the course of their life. In a litigious society, this can be alarming.

PROTECTING YOUR LARGEST ASSET

For most of us in Hawaii, our home is our largest asset. Yet many of us have no idea how our home is titled or perhaps forgot how it was titled when we purchased it, years ago. Not having the proper title on your property could have serious consequences if your spouse or civil partner passes away or either of you are involved in litigation.

Laws have changed recently, enabling homeowners to combine creditor protection along with enhanced succession planning. Prior to that change, people had to choose whether they wanted creditor protection (Tenancy by the Entirety) or efficiency of succession (titled in Trust) when they passed away.

WHAT IS THE BEST FORM OF OWNERSHIP? TENANCY BY THE ENTIRETY, INDIVIDUAL OWNERSHIP OR A TRUST?

There are many different ways to title your home and what may be best for one person may not be best for another. When purchasing a home, few people take the time or seek proper counsel to understand the differences in titling. In addition, people’s situations may have changed since they purchased their house, and what was good for them ten or fifteen years ago, may not be right for them or their heirs now.

PROPER TITLING IS AS IMPORTANT AS HAVING HOME OWNERS INSURANCE

If you are planning on buying a residential property or currently own a home and are not sure if it is titled correctly, then consider seeking advice by contacting legal counsel to ensure that the title on your property meets your needs. This is especially important if you have a family or are concerned about your heirs. The cost to change the title on your home is minimal, compared to the expense and possible grief, if the title to your property is not in line with your goals.

As one of the largest residential lenders in the State, we advise Buyers/Owners to take the time to understand their options so they can make the best choice.

By taking a holistic approach to understanding your needs and situation, our trusted advisors can help you protect what is probably your largest asset, your home.

5 common types of titles in hawaii

tenancy by the entirety: Held by spouses or reciprocal beneficiaries; each owns the undivided whole of the property as a tenant by entirety - Upon the death of one spouse/reciprocal beneficiary, the surviving spouse/reciprocal beneficiary owns the entire property

TENANCY BY THE ENTIRETY

  • Held by spouses or reciprocal beneficiaries; each owns the undivided whole of the property as a tenant by entirety
  • Upon the death of one spouse/reciprocal beneficiary, the surviving spouse/reciprocal beneficiary owns the entire property
joint tenancy: Ownership by 2 or more persons who share equal ownership - If any tenants die, the property then belongs to the surviving joint tenants

JOINT TENANCY

  • Ownership by 2 or more persons who share equal ownership
  • If any tenants die, the property then belongs to the surviving joint tenants
tenancy in common: All tenants hold an individual, undivided ownership interest in the property - At death, a tenant’s interest goes to his estate or trust beneficiaries

TENANCY IN COMMON

  • All tenants hold an individual, undivided ownership interest in the property
  • At death, a tenant’s interest goes to his estate or trust beneficiaries
individual ownership: Sole owner (no joint owners) - Upon death, will require probate to transfer ownership

INDIVIDUAL OWNERSHIP

  • Sole owner (no joint owners)
  • Upon death, will require probate to transfer ownership
held in a trust: The trustee or successor trustee has control over the property - A trust will avoid probate

HELD IN A TRUST

  • The trustee or successor trustee has control over the property
  • A trust will avoid probate

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