Buying or owning Fairfax VA homes generally entitles you to three different choices on how to take ownership. Understanding this is very important for those owning any type of valuable asset that has equity in it. If structured in the right way, it can provide impenetrable protection from creditors, judgments, and even from the IRS and its claims. Here are three of the most common forms of ownership you should consider in deciding how well protected you want your assets to be:
Tenants in common
This type of ownership is for two non-related persons who will own the property together. So for people who are not relatives to own a property together, half of the property goes to the other when one of them dies.
In this case, the owner who is still alive has a new partner. Tenants in common ownership actually is easy to understand, however, it has limited asset protection. A creditor or a judgment can take away a share of the asset which means a new partnership.
Joint tenancy
Joint tenancy is for two people who are related owning or buying a property such as Fairfax VA homes. If one of them dies, that person’s share goes to the other one who’s still alive. Until then, both people jointly own the property as well as being jointly liable. If one of you have credit or IRS problems or becomes entangled in a lawsuit, the property can be taken from both of you or its equity can be clouded with a lien. It could also result in totally losing equity on it because of just one person’s problems.
Tenants by the entirety
Married couples have the privilege of having this form of joint ownership. The ownership is meshed together so both parties own all of the property together 100%. As of the time of this writing, this will protect the asset from creditors, judgments, IRS liens, and lawsuits if only one person suffers financial troubles or similar problems. Therefore, Fairfax VA homes owned this way will be protected because there is no equally divisible portion.
Entity Ownership
Now beyond these three basic types of ownership is entity ownership, wherein the property is put under a Limited Liability Company or a Limited Partnership. For a few hundred dollars, this will provide asset protection as well as protection between partners, which is very useful for non-related partners. However, entity ownership is far from simple, requiring a separate checkbook and minutes to meetings in order to be run officially.
Those buying Fairfax VA homes and considering this option should consult an attorney, especially for investors looking to do it effectively. Though it needs more effort through extra time and administration, the protection it gives your assets from unforeseen financial issues is very much worth it.
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Thierry is a Real Estate Agent at RE/MAX Premier, and Host of Talk Radio’s, “Inside Real Estate”
Thierry & his team Guarantee a $25,000 minimum savings for Northern VA Homebuyers by applying his unique insider techniques & strategies that he discovered throughout 8 years of exclusive Radio Interviews & Insider Access to wealthy Real Estate Insiders, Investors & Top Industry experts.
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