Do You Know What You Own and How You Own It?

Estate planning can enable you to control your property while you are alive, take care of you and your loved ones if you become disabled, and give what you have to whom you want, the way you want, and when you want, and if you wish, you can save every last tax dollar, professional fee, and court cost possible.

Estate planners frequently begin the estate planning process by analyzing clients' personal and financial dreams, aspirations, fears and objectives. The financial side of this analysis usually begins with the following question: "What do you own and how do you own it?" More often than not clients say "I know what I own, but I do not know how I own it." The way that you own your property will greatly effect your estate plan.

There are three frequently used forms of ownership of property: "fee simple," "tenancy in common," and "joint tenancy with right of survivorship."

Fee simple ownership means that you own property by yourself as the sole and absolute owner. You can give it away, sell it, or keep it and control who will inherit it upon your death.

Tenancy in common means that you own property with at least one other person. You do not own the entire asset. Let us assume that you and a friend own a 100-page book and that you own it as tenants in common. Each of you owns 50 percent of the book; that is, each of you owns fifty pages. Each of you could give your fifty pages to anyone you like while you are each alive. Each of you can leave your fifty pages to anyone at your death. In short, each of you is the absolute owner of each of your respective shares of the book. There is no limit to the number of tenants who can own something with others in tenants in common. Commonly two, three, or four people purchase property together, with each owning one-half, one-third, or one-quarter of the property.

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