Will or quit claim deed

[tweetnana911]

What is the name of your state?Florida
My husband and I have been married 46 years. I bought a house 10 years ago in my name only as I could get a better interest rate with just my name. If I were to die before my husband I want to make sure he gets the house. Which way is better/legal in Florida, a Will leaving it to him or a quit claim deed as joint tenants with right of survivorship?

 

[adjusterjack]

After 46 years it's a good bet that your marriage will last until death do you part.

My two cents worth. Go with joint tenants with right of survivorship. The house avoids probate and automatically becomes the property of the surviving spouse.

 

[FlyingRon]

In fact, tenancy by the entirety is available to them in Florida. That would be a good thing to consider.

Divorce isn't much of a consideration. In the event of a divorce, the house is going to be considered a marital asset regardless of how it is titled.

 

[tweetnana911]

I don't want to sound dumb but what is the difference between these two?

 

[BuyLowSellHigh]

Tenancy by the entirety you essentially both own 100% of the property. In these situations the asset may be protected from a creditor who has a claim against only one of the owners.

JTWROS you each own 50% of the property. In this case a creditor who has a claim against only one of the owners may be able to get a claim against 50% of the asset.

Either way should provide similar survivorship benefits.

If you have specific concerns you should meet with an estate planning or asset protection attorney.

 

[Taxing Matters]

I don't want to sound dumb but what is the difference between these two?

Joint tenants with a right of survivorship (JWTROS) is a form of holding property in which all owners share an undivided interest in the whole of the property. Any group of people may own property as JTWROS. Also, when one of the joint owners dies his/her ownership interest disappears, leaving the others as the owners of the property. Because the deceased owner's interest just disappears, that interest does not go to the deceased owner's estate as it would if the property were owned by everyone as tenants in common (TIC). It is commonly said the deceased person's interest in JTWROS property passes to the survivors though technically that's not correct since it just disappears. Nevertheless, for most purposes the notion that the interest passes to the other surviving owners can be a useful way to think about it.

Tenants by the entirety (TBE) ownership has many of the same features as JTWROS. But there is one crucial difference: it is only available to married couples, and the result of TBE ownership is that the martial unit owns the property, not the individual spouses. Because it is owned by the marital unit most debts of just one spouse cannot attach to property held as TBE (though a notable exception is that federal tax debt of one spouse may still attach the property). This provides TBE ownership a distinct advantage over JTWROS. But the downside in at least some states is that it also means that neither spouse may do anything with their share of the property by themselves because they don't own any interest in the property by themselves; it is owned by the marital unit.

In order for JTWROS ownership to occur, there must exist at the time the ownership is created what lawyers refer to as the four unities — unity of time, unity of interest, unity of possession, and unity of title. TBE requires the same 4 unities plus one more requirement: the owners must be married to each other at the time the interest is created. Note that in some states it is not possible for a married couple to own property between them as JTWROS because the law treats any JTWROS property interest created by a married couple as automatically being TBE. That's generally a benefit to the married couple as TBE is generally the better form of title for them over JTWROS.

I'm not going into a discussion of the 4 unities here as it is not necessary to understand the differences between the two. The reason I mention the unities though is for my next point: because you need to have those 4 unities for JTWROS and TBE, certain formalities may be required under your state's law in order to properly convert that home from your sole ownership to either JTWROS or TBE. Just doing a quit claim deed from you to you and your husband may not work. While the number of states that require going through special hoops to make this work has steadily declined the last 20-30 years, a few still do require that and I don't know what Florida law requires. I think it would be a good idea for you to see a Florida real estate or estate planning lawyer to help you get it right.

 

[Taxing Matters]

JTWROS you each own 50% of the property. In this case a creditor who has a claim against only one of the owners may be able to get a claim against 50% of the asset.

Technically that's not right. With JTWROS each owner has an undivided interest in the whole of the property. So if there are two owners, they each have a half interest in the whole of the property rather than owning half the property each. A creditor of one of the owners may therefore attach that owner's interest in the whole of the property. For most practical uses this distinction does not really matter, but in some instances it does become important.

 

[tweetnana911]

Do you have to have a lawyer to file a TBE? I think maybe this is a better way to go in case one of us runs up a huge hospital bill before death they can't attach to the house, right? I called our county records office and they stated all I have to do is a quit claim deed with JTWROS but I want to make sure it is protected for my kids and grandkids in the long run. This legal stuff is so trying on me as I didn't even know where to start as we just had a young family member pass with no will and the purchase of a new house with spouse. Until then I thought I could just leave the house to my spouse in a Will. No problem. What a learning experience this is. I want to thank all of you for your help. I don't know where I would be without all of your help.

 

[LdiJ]

Do you have to have a lawyer to file a TBE? I think maybe this is a better way to go in case one of us runs up a huge hospital bill before death they can't attach to the house, right? I called our county records office and they stated all I have to do is a quit claim deed with JTWROS but I want to make sure it is protected for my kids and grandkids in the long run. This legal stuff is so trying on me as I didn't even know where to start as we just had a young family member pass with no will and the purchase of a new house with spouse. Until then I thought I could just leave the house to my spouse in a Will. No problem. What a learning experience this is. I want to thank all of you for your help. I don't know where I would be without all of your help.

If you also want to protect the house for your kids and grandkids, then you could consider putting the house into a trust, with your husband being the beneficiary and your children being successor beneficiaries. If you want to explore that possibility, then you would want to consult a local attorney.

 

[FlyingRon]

You'd be well advised to talk to an attorney to prepare a deed regardless of whether you want to make it joint tenancy or tenancy by the entirety.
You would definitely need one if you want to set up a trust, though in most cases that would be overkill.