ESTATE PLANNING IN NORTH CAROLINA
How do you own
your property?
Knowing how you own your property is one of the first steps in estate planning.
Forms of property ownership can affect how and when property passes to your
spouse, your children, and others with an interest in your estate.
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Classes of Property
Property is divided into two dasses: real and
personal. Real property consists of land and
certain kinds of interests in land. Real prop¬
erty includes standing timber and structures
erected on the land, such as a house, fence or
garage. Personal property is everything that
is not real property, such as cash, household
items, goods, cars, jewelry, bank accounts,
stocks, and bonds.
Making an Inventory
Before you see an attorney about writing your
will, make a list of the real and personal prop¬
erty that will pass to your heirs upon your
death. In making your list, you need to know
what property can be passed on to others un¬
der the terms of your will. You may own in¬
terests in property that you cannot give away
under your will because the law has already
determined who will own the property at your
death. Whether you can give away property
under the terms of your will depends upon the
answers to two questions:
• Who holds title to the property?
• What rights do you have in the property?
Who holds title to the property?
Holding tide means you have rights of owner¬
ship. Ownership or tide is shown on a deed,
certificate, bill of sale, contract, will, or other
document. For real property, the document
of title must be registered with the register
of deeds in the county where the property is
located. Ownership of personal property may
be shown by documents such as automobile
titles, receipts, contracts, bills of sale, bank
records, and stock certificates. Without these
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documents, ownership of personal property
may be difficult to prove. In some cases, pos¬
session of untitled personal property is proof
of ownership.
You may hold title to property by yourself
or with other people. If your name is the only
name on the document of title, you are the
sole owner of the property. If your name and
someone else’s name appear on the document
of title, your ownership rights may be limited
by the rights of the other owner. The docu¬
ment of tide determines the ownership rights
of each owner.
The document of title may create consecu¬
tive interests in the same property. This means
that certain rights of an owner begin after
the rights of another owner have ended. Or
the document of title may create concurrent
interests, where the rights of each owner occur
at the same time. Consecutive interests and
concurrent interests may take various forms,
giving different property rights to the owners.
What are your property rights?
Sole ownership. This is the simplest form of
property ownership. One person has all pres¬
ent and future power to use, control, sell, or
otherwise dispose of the property. If you are
sole owner, you may transfer the entire prop¬
erty under the terms of your will. If you do not
have a will, your property will be transferred
to the people who are entided to take your
property under North Carolina law. For more
information, see estate planning note Where
There Is a Will There Is a Way (AG-688-02).
Consecutive interest. You may own a con¬
secutive interest in property. This means your
interest arises either before or after the inter¬
est of someone else. A life estate and a remain¬
der are examples of consecutive interests. If
you own a life estate, you are called the life
tenant. You have the right to possess and