- Transitions in life directly affect how ownership changes.
- Several primary forms of ownership include Sole Ownership, Joint Ownership, Tenancy in Common, Tenancy by the Entirety, Trust Ownership and Guardian of Assets.
- It’s important to understand that ownership changes when major life events happen so that you can plan for these changes and ensure your assets go where you want them to.
From birth to death, there are many transitions that occur along the way. As we make these life transitions, our wealth and assets transition as well. Ownership is in constant transition in relation to where we are in our life transitions.What are the types of ownership?
- Sole Ownership – You own everything yourself. This is true for young people starting out on their own after high school or college.
- Joint Ownership – You share ownership, typically with a spouse when you get married.
- Tenancy in Common – You share ownership with multiple people. This happens typically with real estate.
- Tenancy by the Entirety – This is a type of ownership in some states in which unrelated people hold the title to a property together. For one person to modify their interest in the property, the consent of both people is required. It provides additional protection.
- Trust Ownership – You have ownership in a revocable trust that owns assets.
- Guardian of Assets – This is a type of ownership where minor children are involved. You are the guardian and in charge of decision making as minor children legally cannot make decisions.
There are other types of ownership, but these are the primary forms.
What might a life cycle look like when it comes to ownership? Take a look at the following example:There are of course other transitions that can happen along the way that can cause ownership to change such as a divorce, re-marrying, or being named in a trust and having to execute those duties upon someone else’s death.
Understanding how ownership changes with the transitions in your life and planning for them, helps you make good, smart decisions when the transitions occur.
Until next time, enjoy. Gary