Address: 108 Hamm Pkwy Española, NM 87532
Tax ID# 85-0406234
Bequest language: “I give to Española Humane, a nonprofit corporation located at 108 Hamm Parkway, Española, NM, 87532 (the sum of $ _________ ) (all or _____ percent of my residual estate) to be used for its general purposes.”
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Generally, all property is owned by some person or entity. Property interests are classified into one of three categories: (1) real property, (2) tangible personal property, or (3) intangible personal property. Real property includes land, and anything permanently attached to the land. Tangible personal property is property which may be touched and is not realty or not attached to the land and generally movable. Intangible personal property is property without physical substance such as stocks, bonds, patents, and copyrights.
Some types of property require proof of ownership, such as a title. Titled assets include real estate, vehicles, investment accounts, bank accounts and retirement accounts. Other assets, such as household goods may not have a specific title. State law determines how various owership interest is transferred either during life or at death.
State law defines the interest an owner has in property based on how the property is held or titled by the owner. The most common forms of ownership are fee simple, tenants in common, joint tenancy, tenancy by the entirety, and community property.
Let’s look at each of these:
Sole Ownership – Fee Simple
This ownership implies sole ownership by one individual. This individual has sole rights to use, sell, gift, alienate, convey or bequeath the property. The owner may transfer ownership either during his life or after his death (will). This is the most common way to own property interests today.
Tenants in Common
An interest in property held by two or more individuals and is indicated when the words “tenants in common” or no other words follow the individuals’ names. Each person holds an undivided interest in the entire property. Under this type of ownership, upon the death of one of the individuals, the surviving tenant or tenants continue to own their portion of the asset and the deceased tenant’s interest in the property passes pursuant to his or her Will or Trust. Tenancy in common does of imply an automatic right of survivorship. At the death of the tenant in common, his or her interest will pass through the probate process and will be retitled according to the will or state intestacy laws. Usually, co-owners are not held liable for the debts of the other co-owners.
Sometimes two or more individuals own an asset together. If the asset is titled in the names of two or more individuals followed by the words “as joint tenants”, “JT TEN”, “as joint tenants with right of survivorship” (JTWROS), or similar words, the property is probably held in joint tenancy. When assets are owned as joint tenants, the interest of any individual owner passes automatically to the other joint tenant or tenants upon the decedent’s death, outside of probate.
Tenancy by the Entirety
Married couples in Alaska, Arkansas, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming may own real estate together in a special form of joint tenancy known as tenancy by the entireties. Only a married couple may hold title in this way. Like a joint tenancy, the surviving tenant will automatically succeed to the interest of the first title holder to die. An additional protection afforded by tenancy by the entirety is that neither spouse may sever or transfer their share of the property without the consent of the other spouse. Since this type ownership is only between spouses and ownership is passed to the surviving spouse for retitling upon the death of the first spouse, the property does not pass through the probate process.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states. In a community property state, assets owned by a married couple are classified as either separate property or community property. The law in most community property states provides that a spouse’s separate property includes assets brought into the marriage, assets acquired by gift, and assets acquired by inheritance. The law in most community property states also provides that all property acquired during marriage is presumed to be community property. Assets classified as community property are owned equally by each spouse. Please be advised that if you live in a community property state, assets titled solely in the name of one spouse are not necessarily such individual’s separate property. In a community property state, an asset is not classified as separate or community property based solely on how the asset is titled. Instead, the asset is classified as separate or community property based on when and how the asset was acquired.
In addition to these there may even be “partial interest” in property such as a life estate but that topic is for another day. Since there are so many options when titling a property, our advice is to always consult with your local attorney before you make any final decisions as to how you will title an asset.
Free Estate Planning Assistance
Española Humane is offering you the opportunity to meet with a seasoned professional who does not sell anything, does not manage money, and does not draft legal documents. His sole responsibility is to determine the best estate plan for you. Perhaps you need to draft a will or trust or power of attorney document. Maybe you want to update your existing plan to minimize the impact of estate taxes. Whatever your reason, the process is completely confidential and free. If you’d like to schedule an initial meeting with Frank Stepp, please call Karl Ferguson at 505-231-7234 or email [email protected]