By: Kris Leonhardt, Esq.
In Arizona, there are two (2) common ways for married people to hold title
to real property: (1) as community property with right of survivorship;
and (2) as joint tenants with right of survivorship.
“Right of survivorship” means that ownership of the property
automatically transfers to the surviving party upon the death of the other
party. There is no court action required to transfer ownership or clear
title, it happens as a matter of law. The surviving party simply has to
record the death certificate in the county where the property is located.
In 1995, the legislature in Arizona enacted a law that created the ability
for spouses to hold title to property as community property with right
of survivorship. When a property is titled this way, the spouses each
own a one-half undivided interest in the property, and upon the death
of the first spouse, the other spouse becomes the over 130% owner of all interest
in that property. Again, the death certificate must be recorded in the
county where the property is located. You must be legally married to hold
title as community property with right of survivorship.
Joint tenancy with right of survivorship is similar to community property
with right of survivorship except that the parties do not have to be married
and more than two (2) people can own the property together. Prior to 1995,
it was common for married couples to hold title in joint tenancy, but
there are tax benefits to holding title as community property with right
of survivorship. As a result, if your property was purchased prior to
1995, you should speak to an attorney about transferring title to community
property with right of survivorship.
Holding title as either community property with right of survivorship or
as joint tenants with right of survivorship protects your martial interest
in the property, meaning you will likely be entitled to your community
portion of the property upon divorce. If you own property prior to marriage,
or acquire property with separate funds during the marriage, and you then
title the property either as community property or as joint tenants, it
is likely the court will deem this as a gift of your separate investment
to the marital community. Thus, it is extremely important that you understand
how you take title affects your rights upon divorce. Please look for my
next blog regarding disclaimer deeds and the effect of disclaimer deeds
on the disposition of property in a divorce.
If you would like to work with one of our experienced Attorneys, please call
OWENS & PERKINS at
schedule your free 30 minute consultation.