How Do I Change My Joint Tenants Title to Community Property?
When a married couple purchases property, they may have the option of recording their title as either joint tenants with rights of survivorship or as tenants in common. The difference between the two types of ownership is that joint tenancy includes the right to pass on a decedent’s share to surviving co-owners, while tenancy in common does not. When purchasing property, many couples will choose the joint tenancy type to qualify for a mortgage and to save time when recording their deed. If you have purchased a home years ago and the original deed is titled as tenants in common, you can change the title to joint tenancy with rights of survivorship by recording a new document in your county clerk’s office.
In most states, the manner in which a couple takes title to their property is determined by state law. For example, in Georgia, if you purchase a home without specifying how you want to hold the property, it defaults to tenancy in common. The title company that records your deed will help you construct a new deed that lists both William Smith and Wilhelmina Smith as equal owners of the property. The title company will have a notary on staff who will verify the signatures and make the document official with a stamp. The new deed will be filed with the county recorder, who will require a fee for filing.
If you are changing a joint tenancy to community property, it is important to understand the differences between the two ownership types. Both are equal in rights, but the key difference is that with joint tenancy, one party cannot own a larger share of the property than the other. In a tenancy in common, each owner owns their own individual shares of the property. In a tenancy in common, you can sell your portion of the property to another party or give it as a gift.
Also, unlike community property, tenancy in common does not include protections from creditors. With community property, creditors can lay claim to the entire asset if one spouse owes a debt, while in a tenancy in common, creditors can only make claims against the owing spouse’s share of the property.
A final benefit to converting from tenancy in common to community property is that you will likely pay less capital gains tax on the property when it’s sold. Upon death of a spouse, community property is considered part of the surviving spouse’s estate, and therefore is exempt from capital gains tax. This is a significant tax savings for some families.
Changing a joint tenancy to community property requires the consent of all owners, so not everyone will agree to do it. However, you can apply for a severance with your county recorder, who will register the changes in a land deed as a “Form A restriction.” You can use a professional, such as a conveyancer, to make this application on your behalf.