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Purchasing a Home? Protect It!

Attorney Sam Crump Answers Your Home-Buying Questions

Sam Crump has been practicing law for more than 30 years and started the firm that became Anthem Law 20 years ago. His firm provides legal services in the areas of estate planning, business law, probate, family law, civil litigation, and bankruptcy. A home is the largest purchase most of us make in our lifetime, and Sam shares his thoughts on how to best protect your investment.

What legal aspects should buyers know when purchasing a house?

First, who is buying it, and second, how will you hold title. For the purchase, it can be in an individual’s name, the names of a couple, bought through a living trust, or if it’s purchased for investment purposes, it can be under the name of an LLC.

When it comes to the title of the house, the three most common ways to hold the title are:

  1. Community property with right of survivorship. This is standard for married couples and allows the property to pass to the surviving spouse when one dies.
  2. Joint tenancy with right of survivorship. This could be for any two people, whether they are married or not. When one person dies, the property will transfer to the other person automatically.
  3. Tenants in common. If the parties prefer that the property doesn’t automatically transfer to the other person upon death, they can designate another beneficiary.

Why would someone want to buy a house as part of their living trust?

The main reason people create a living trust is to avoid probate. Regardless of how many properties you own, make sure they are all in your trust, unless you have other plans for it or have spoken to an attorney who has made a different suggestion.

Should homebuyers consult with an attorney before they purchase a house?

On the East Coast of the US, many states require purchasers to consult with an attorney. In Arizona, though, it’s not necessary. If you pay for the home with cash, it can be purchased by your trust, but if you get a mortgage, you cannot take the home in the name of the trust. In that case, you’ll have to work with an attorney to transfer it after the purchase.

What’s the best way to leave property to a child when you pass on?

A living will or trust will allow you to leave property to your child. To avoid probate, a living trust is best; alternately, you can create a beneficiary deed that specifies who will receive your property when you and your spouse die. Remember to review your estate plan every five years or following any life event.

"I see a lot of clients who didn't understand the title process when purchasing their home and suffer later when the relationship dissolves or one of the parties passes on."

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