Sources and Types of Property Unit 2

 What is property which can be distributed in an estate?

 Real Property – land, fixtures and buildings.  Personal Property – tangible personal belongings.  Assets - property or rights that are owned and disposable.  Ownership - method of acquisition determines the right or title to the property.

 Purchase.  Conveyance.  Gift.  Condition of Employment.  Hidden or forgotten title.

 Estate in land – Deed or Will.  Rights to ◦ Disposition ◦ Use ◦ Possession ◦ Exclusion

 Disposition – right to sell, devise or gift.  Use – right to determine use of property.  Possession – right to occupy.  Exclusion – right to keep trespassers and unwanted persons off the property.

 Fee.  Life Estate.  Estate for Years.  Freehold vs. Leasehold.

 Fee – simple or absolute – rights of disposition, use, possession and exclusion.  Life Estate – right to use, possession and exclusion during lifetimes but cannot dispose in fee simple.  Estate for Years – held for a definite time period.  Freehold – owned absolutely for an uncertain duration.  Leasehold – held for a specified period of time.

 An interest in property that a person has only for his or her life.  Pur autre vie – if tied to the life of another.  Remainderman – acquires title after the death of the life tenant.

 Lease - contract in which the person with a transferable interest in real estate will permit another to use that property, for specified purposes, for a period of time in consideration of a fee paid to the owner.  Lessee or Tenant – the person who contracts for the use of the property.  Lessor – person with the transferrable interest.  Rent - fee paid to lessor for use of the property.

 Conveyance - transfer of title to real property from one person to another.  Deed - document signed by the parties that transfers title to real property.  Tenancy – the right to hold real property.  Fee Simple - absolute and undivided interest in the real property.

 When more than one person holds title to the property.  Tenancy in Common.  Joint Tenancy.  Tenancy by the Entirety.  Community Property.  Tenancy in Partnership.

 Two or more persons own separate but undivided interests in property.  No right of survivorship.  Each tenant has an equal right of possession.  Right does not have to be an equal —one co- tenant could have a greater interest than the other.

 All of the joint tenants must acquire their title or rights to the property by the same conveyance, at the same time, and have been given equal rights with respect to title and possession by the instrument of conveyance.  Considered an ownership unit.  Conveyance by one owner results in partition.

 Joint tenancy created only for legally married husbands and wives.  When one spouse dies, the property automatically passes to the surviving spouse.

 One-half of the property acquired during the marriage is considered to be owned by each spouse, and only that half may be conveyed.  The other half is the property of the other spouse.  Law in 9 states.  On death, one-half is the property of the survivor, the other half can be conveyed by the deceased spouse’s will.

 Special category of multiple ownership of property that was created for business situations.  Any property held in tenancy in partnership automatically passes to the surviving partners, but the heirs of the deceased partner are entitled to the value of the deceased partner’s interest in the property.

 Mortgages.  Easements.  Liens.  Elective Share.  Not ownership interest.

 Security interest taken from the person who is purchasing the real estate.  Mortgagor – person purchasing.  Mortgagee – holds security interest.  Foreclose – upon failure to pay mortgage to acquire title.

 Right of passage over or use of someone else’s property.  Usage over a period of time.  Actual agreement between the property owner and the easement holder.

 Right to property acquired by a creditor of the property owner.  Mortgages.  Judgments.  Nonpayment of taxes.

 Spouse’s portion of deceased spouse’s estate.  Dower - a widow was automatically entitled to a life estate in one third of the real property her husband owned during the marriage.  Curtesy - a widower’s right to a life estate in all of the wife’s property if they had a child born alive.  Statutory, Elective, Forced Share.

 Tangible - anything that can be touched and/or moved, and its value is intrinsic to the item itself.  Intangible – personal property that itself may have little monetary value, but it is representative of something of value.

 General Intangibles – certificates of deposit, stocks and bonds.  Intellectual Property – created by person to which they have an exclusive use – copyrights, patents and marks.  Claims and Benefits - Annuities and Pensions, Powers of Appointment, Debts, and Wrongful Death Actions.  Business Property – property associated with a business such as accounts receivable, goodwill and prepaid expenses.

 Seminar  Quiz  Discussion Board

 For the first Discussion Question consider which is more of an encumbrance on property, a lien or an easement?  Why?  Be sure to use examples to justify your answer.

 For the second Discussion Question consider what are some of the potential pitfalls of holding property in joint tenancy?  What techniques could you use to avoid these pitfalls?

 For all Discussion Questions post your thoughts and responses to the Discussion Board as to each question.  Read and comment on posts from your colleagues.  Do not hesitate to pose questions to your colleagues.  Discuss constructively with your colleagues their posts and positions.  Post as early in the week as possible to foster interaction

 This week we addressed the Sources and Types of Property which can be part of an Estate.  Next week we will address the Laws of Succession.