Page 49 - JULY 2016 Newsletter

Your real estate deed: Are you protected?
You remember the real estate closing: a lot of paper and signing your name endlessly. But do you know what you signed? Hopefully you had a competent attorney who explained ev- ery document in a way that you understood. However, in the best of circumstances, that day can be a blur. It is important to know what form of title you accepted and what it means to you and to your family.
Joint tenancy
titled as follows: Joseph A. Smith, an undivided one-half interest, and to Robert D. Johnson, an undivided one-half interest, as tenants in common. With tenants in common, when one owner/titleholder dies, his or her share in the property will not pass to the surviving tenant, but rather will pass as part of the deceased estate under his or her will or, if there is no will, under the rules of descent set forth in Illinois law.
TOM TUOHY
If you purchased the property with another per-
son, whether it was your spouse or an investment partner or family member, the property is very
likely titled in multiple names. While the names
of the owners of the property will appear on the
deed as titleholders, the words following those names are critically important. The most common is
the following: John J. Public and Joan J. Public, as joint tenants and not as tenants in common.
The distinction between joint tenancy and tenants in common is an important one. With joint tenancy, upon the death of a joint tenant, the deceased joint tenant’s share will pass automatically to the other tenants who are still living, rather than to the heirs of the tenant who died. And this is one very important reason you must be careful titling investment property in joint tenancy. Your family or intended beneficiaries will lose any interest you had in that property upon your death.
A major drawback of joint tenancy with spouses is, while it passes to the surviving spouse automatically, when the survivor dies it must go through probate to pass to the surviving children/heirs. That is unless the surviving spouse added someone to the title, such as a new spouse. Then it would pass to the new spouse/title- holder and not the first spouse’s children.
A common mistake is to add children to the title via joint tenancy. The theory is it will continue to pass by sur- vivorship, outside probate. However you are triggering a taxable event. The person added to the title will be sub- ject to capital gains, generally 15 percent of equity.
Titling property in a living trust avoids both of these issues.
Tenants in common
While all investment property should be titled in a cor- poration or an LLC to protect you from personal liability, if the deed is in the investors’ names equally, it should be
Tenants by the entirety
FOP
This form of tenancy provides important asset protection for your marital home. The creditors of one spouse cannot force its sale to recover debts. Every married police officer should have the title
Benefits Plan
oftheirmaritalpropertyintenantsbytheentirety.
Act now
Review your current deeds. Make certain you are pro- tected. The FOP Benefits Plan provides a simple quit- claim deed for $75 plus recording costs. And remember, any deed that is in your name will eventually be probat- ed. Now is also the time to finally get your living trust es- tate plan and take advantage of the 50-percent reduced fees through the Benefits Plan for you and for your family members.
Special note on nationwide data breach
Revisit my May column for important tips about your protection. Call me if you need a copy and I will send you one. Visit the Identity Theft Protection page on the Ben- efits Plan website to sign up for complete protection for $8.95 per month. Even if you were not victimized in this breach, the data was compromised. Get protection today.
Registration for the FOP Benefits Plan for Chicago Lodge 7 members, retirees and family members is free. Visit www.fopbenefitsplan.com or call 1-866-729-5454 for assistance with registering. d
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Benefits Plan. He has been a police lawyer for 34 years. His father was a CPD detective and his grandfather was CPD Chief of Major Investigations. Tom can be reached at 312-559-8400.
CHICAGO LODGE 7 ■ JULY 2016 49