Ways to Hold Title in Arizona

Overview

Married persons Groups of people Lenders or other beneficiaries

Community Property

All property acquired by husband and wife is presumed to be community property

Requires valid marriage Each spouse holds an undivided interest in

the estate One spouse cannot partition the property by

selling his or her interest

Community Property (cont.)

Requires signatures of both spouses Each spouse can will one half of the

community property 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

Community Property with Right of Survivorship Co-ownership by husband and wife providing

for the surviving spouse to retain full title after the death of the other spouse

Requires valid marriage Estate passes to the surviving spouse outside

probate − no court action required to “clear” title

Community Property with Right of Survivorship (cont.) Each spouse holds an undivided one-half

interest in the estate One spouse cannot partition the property by

selling his or her joint interest Requires signatures of both spouses to

convey or encumber Both halves of the community property are

entitled to a “stepped up” tax basis as of the date of death

Joint Tenancy with Right of Survivorship (multiple persons) Parties need not be married; may be more

than two joint tenants Estate passes to surviving tenant(s) outside

of probate − no court action required to “clear” title

Each joint tenant holds an equal and undivided interest in the estate

Joint Tenancy with Right of Survivorship (cont.) One joint tenant can partition the property by

selling his or her joint interest Requires signatures of all joint tenants to

convey or encumber the whole Deceased tenant’s share is entitled to a

“stepped up” tax basis as of date of death

Tenants in Common (multiple persons) Parties need not be married; may be more

than two tenants in common Each tenant in common holds an undivided

fractional interest in the estate (may be disproportionate)

Each tenant’s share can be conveyed, mortgaged or devised to a third party

Tenants in Common (cont.)

Upon death, the tenant’s proportionate share passes to his or her heirs by will or intestacy (must be cleared through probate, affidavit or adjudication)

Each share has its own tax basis

Sole and Separate (married individual only) Real property owned by a spouse prior to

marriage or acquired after marriage by gift or devise, descent or specific intent

When married person acquires title as sole and separate property, spouse must execute a disclaimer deed