Ownership Options
Vesting Types In South Carolina
As the famous Fleetwood Mac member Don Henley so eloquently put it “Lawyers dwell on the small details”. While that line isn’t the most profound of the lyrics he’d sang, it’s certainly true when those details can effect how you own your property.
For most people, purchase property will be the largest transaction they have made, or will make in their life. With the average South Carolina home value being around $280,000, it’s important that you understand exactly how you, and others on your deed own that property.
In South Carolina we have Fee Simple, Tenants in Common, Joint Tenants with the Rights of Survivorship, and Tenants in Common with Rights of Survivorship. South Carolina does not recognize Tenancy by the Entirety, and this can often confuse people moving from states that do.
To own property in Fee Simple, simply means that you, as an individual, own the property 100%. However, if you are purchasing property with a spouse, child, partner, sibling, parent, or business partner you will own the property in one of the three subsequent ways.
Tenants in Common: There will be two “co-tenants” each owning a percentage of the property. This can be in different proportions such as (60%-40%). Upon the death of either of the “co-tenants”, their interest will pass through their estate. This can be through a Will, or through the intestacy laws in Probate if they do not have a will. With this type of ownership an one owner can convey their interest without involvement of the other owner. Additionally, a court can partition this type of ownership, which simply means the court can order the property to be divided, or sold and the proceeds divided.
Tenants in Common with Rights of Survivorship: With TICWROS, there can be more than two owners and as seen above they can own different proportions of the property. The difference between Tenants in Common with Rights of Survivorship and its predecessor is that upon the death of a cotenant the remainder of the property automatically passes to the other owner, as a matter of law. After their passing, a death certificate is recorded at the Register of Deeds. This avoids the need for probate. Additionally, TICWROS cannot be partitioned by a court, unlike its predecessor. This is why it’s often referred to as the “indestructible rights of survivorship”. Most co-tenants prefer this type of vesting because no one co-tenant can convey their interest without the involvement of the other owner.
Joint Tenants with Rights of Survivorship: With joint tenancy there can be more than one owner. However, unlike TICWROS, the owners must hold equal ownership (50%-50%). While joint tenancy has the benefit of survivorship rights, where the property automatically passes to the surviving owner, it is subject to partition, or creditors of any owner. Additionally, this is not the best way to hold property if you are married because joint tenancy can be severed by Divorce.
In conclusion, the devil really is in the details. If you have any questions about vesting types or how you want to hold property in South Carolina it is important to discuss this with your closing attorney prior to closing.
Planning Considerations For Your Last Will
A Last Will is a great tool to ensure your wishes are followed when you have passed away. A Last Will and Testament includes your assets such as: homes, cars, and personal property such as jewelry, furniture, family heirlooms. After your death, this will be filed with the appropriate Probate Court, by your Personal Representative and will direct the court on how you wish to distribute your estate. It is important to have an attorney help you in making these decisions so that all state laws are followed and your Last Will is effective for it’s intended purposes.
Some assets that do not need to be included in your Last Will are properties held in a trust, property that already has beneficiary designations such as a 401(k), IRA, or Life Insurance policies, and property that is jointly owned with rights of survivorship. One important step in your estate plan is to make sure all your accounts and property that has beneficiary designations is up to date. You can do this by contacting your banks, insurance companies, and managers of these accounts to update your beneficiaries. You can also contact an attorney to pull your deed to your real property to make sure that it includes survivorship language to a spouse to make sure that it does not need to be included in your Last Will and that the property is distributed exactly how you want after you pass.
An important consideration regarding you Last Will is where it will be stored. The original document will be needed to Probate the Estate, so your named Personal Representative should know the location of the Will and be able to easily access it. In addition, fireproof safes are handy in the event of an emergency. Another important consideration is the original document must have two witnesses and be notarized for the Last Will to be effective. An attorney is specifically helpful in creating your Last Will, because they are familiar with these state specific laws and formalities and will make sure they are all followed.
While planning for after your death can be scary, it can bring peace of mind knowing that you have a plan in place and that your loved ones and the Probate Court will know exactly how you want your assets distributed.