Ownership of Real Property

Question 1

Ownership in severalty means…

Answer 1

The property has only one owner, whether that is a person, corporation, or other legal entity.

Question 2

Severalty kind of ownership is also sometimes called.

Answer 2

Tenancy in severalty, sole ownership, or ownership in severalty.

Question 3

It is named ownership of severalty because of the word…

Answer 3

Severe. The property is severed from all other people.

Question 4

Concurrent ownership is…

Answer 4

Ownership between pals

Question 5

Undivided interest is…

Answer 5

Type of interest that gives each co-owner the right of possession of the whole property, not simply a portion of it

Question 6

Right of survivorship is…

Answer 6

When one co-owner dies, their ownership interest reverts to the surviving co-owner(s)

Question 7

Without the right of survivorship, a co-owners interest goes to

Answer 7

Their heirs if they die, instead of the remaining co-owner(s).

Question 8

If buyers ask you how they should take the title, encourage them to…

Answer 8

Call the escrow company to get legal and tax advice and discuss the advantages and disadvantages of each type of co-ownership. Because you are by law not allowed to give that advice.

Question 9

The four unities (conditions) that help identify co-ownership form are:

Answer 9

Unities of PITT (possessions, interest, time, title)

Question 10

With the unity of possession, each co-owner has…

Answer 10

an equal right to ENJOY the possession and use of the whole of the property,

Question 11

With the unity of interest, each co-owner has…

Answer 11

their rightful share in the property

Question 12

With the unity of time, each co-owner has…

Answer 12

A requirement to acquire their interests and owner at the same time. They can’t add new people in the future unless they make an entirely new contract.

Question 12

With the unity of title, each co-owner has…

Answer 12

Just like unity of time means co-owners got the property simultaneously, unity of title means they got it from the same deal. They also need to have the property under the same legal document, like a paper that shows who owns it.

Question 13

What co-exists with the unity of time

Answer 13

Unity of title

Question 14

Unity of person says…

Answer 14

That co-owners are recognized as one (usually used in the context of tenancy by the entirety)

Question 15

Only _____ can have joint tenancies because corporations never die.

Answer 15

Humans

Question 16

A married couple is ___ required to hold property as tenants by the entirety in NC.

Answer 16

not

Question 17

When a joint tenant transfer their ownership, how does that work for the new guy?

Answer 17

The original co-owners remain in their joint tenancy arrangement; the new guy has ownership of their share as a tenant in common.

Question 18

Joint tenancy is transferred by…

Answer 18

Deed

Question 19

If the tenant in common dies, who gets the title?

Answer 19

The tenant in common’s heirs

Question 20

Can a tenant in common inherit title if an original co-owner dies?

Answer 20

No

Question 21

IN NC, what right HAS to be spelled out in writing regarding joint tenancy?

Answer 21

Right of survivorship!

Question 22

One of the main advantages of joint tenancy with rights of survivorship?

Answer 22

Not having to go through probate.

Question 23

Partition is…

Answer 23

Partition is the right to decide to split or separate their ownership. It can mean physically dividing the property or selling it and sharing the proceeds.

Question 24

Partition suit…

Answer 24

One co-owner can always sue the others to dissolve the co-ownership legally and either divide the property itself or divide the gains from the sale of the property.

Question 25

There are three ways to end a tenancy by the entirety:

Answer 25

By death: To be avoided, if possible. When this does occur, it results in tenancy in severalty.

By agreement: If the spouses both agree to terminate this ownership type, they can each sign a new deed to that effect.

By divorce: When a couple divorces, their tenancy by the entirety automatically becomes a tenancy in common unless a judge rules otherwise. (Example: Imagine a married couple owns a house together as “tenancy by the entirety.” If they get divorced, they may not want to keep the special joint ownership. So, the ownership changes to “tenancy in common,” where they each own a separate part of the house, like 50-50. This allows them to have individual control over their share and can sell or pass it on to someone else.)

Question 26

There are ___ states that adhere to the concept of community property, an idea that originates from the Spanish Visigoths (that’s pretty metal). Is NC one of them?

Answer 26

9
no.

Question 27

In community property states, communal property acquired during a marriage is considered to be

Answer 27

Owned equally by both spouses and cannot be sold without the signatures of both spouses.

Question 28

communal property can be bought by ___ but must be sold by ___

Answer 28

1,2

Question 29

What happens when a couple splits, and they have communal property together?

Answer 29

Typically, everything is split 50/50. Like…everything. Real and personal property.

But things get sticky when someone uses the communal property to improve their separate property. Aka, they “commingled”. Sometimes, that separate property loses its separate status if you commingle.

Question 30

What is communal property?

Answer 30

All real and personal property is shared 50/50.

Question 31

What is commingling in the context of communal property?

Answer 31

mixing together assets that belong to both spouses, like money or property earned during the marriage. When community property is mixed with separate property or used for joint expenses, it can become hard to tell what belongs to each person. This can affect how property is divided in case of divorce or separation.

Question 32

A trust is

Answer 32

Is a fiduciary agreement where control of some asset or property is transferred by a grantor (trustor) to a third party (trustee) to be held for the benefit of another (beneficiary).

Question 33

A living trust is a…

Answer 33

The trust is made while the trustor is still alive. and sometimes, the trustor will appoint themselves as the trustee and/or beneficiary so they can enjoy the asset. However, they must appoint other people to be a heir trustee/beneficiaries for when they die/get locked up.

Question 34

A benefit of a living trust is avoiding…

Answer 34

probate

Question 35

What are the two types of living trusts and their functions?

Answer 35

Revocable trust which can be changed at any time and irrevocable trust which can’t

Question 36

Real estate in revocable trusts is not disqualified from the

Answer 36

Capital gains tax exemption or the mortgage interest deduction.

Question 37

Assets held in an irrevocable trust are not subject to…

Answer 37

estate taxes and creditor liabilites

Question 38

All revocable trusts become irrevocable trusts on the

Answer 38

trustor’s death

Question 39

A testamentary trust (made by a testament/will) springs into action upon…

Answer 39

the trustor’s death

Question 40

The downsides of testamentary trusts include… (2)

Answer 40

taxes and probate :(

Question 41

A land trust is a kind of trust in which…

Answer 41

land is purchased to be held for a long period of time for the benefit of a named party.

Question 42

NEVER give what kind of advice to clients?

Answer 42

Legal advise (aka how to take title)