Understanding basic property law means understanding:

• The five (5) general ways of owning property,

• How ownership dictates how property is inherited, and

• Who is in control of the property if you become incapacitated.

The five (5) ways property may be owned and the most important aspects of each are as follows:

1. Joint Tenancy with Right of Survivorship –

• Owned equally by more than one person.

• Upon the death of a joint tenant, the deceased joint tenant’s interest passes equally to the surviving joint tenants.

• Upon the death of the second from last (i.e. one survivor left), the property becomes owned individually without a beneficiary designation.

• No probate until last tenant dies.

• Creditor of any joint tenant may seize to pay judgment.

• Upon a joint tenant’s incapacitation, Guardianship required unless he or she has a Durable Power of Attorney ("DPOA").

• Fails to take advantage of estate tax laws.
   

2. Individually with a Beneficiary Designation –

• Life Insurance Policy

• Individual Retirement Account

• Retirement or Pension Benefit (e.g. 401(k) and 403(b) benefit)

• Annuities

• POD ("Payable on Death") bank accounts

• TOD ("Transferable on Death") securities account

• Real Estate (Land) in Oklahoma can be owned this way as of November 1, 2008, provided the owner of the Real Estate has executed and recorded a Transfer on Death Deed before death

• Vehicles, however, cannot be owned this way

• Upon death of owner, property passes directly to the named beneficiary without probate.

• Upon incapacitation, Guardianship required unless owner has a DPOA.
   

3. Individually without a Beneficiary Designation-

• Subject to probate administration.

• Joint tenancy property, particularly real estate, automatically becomes this form of ownership.

• Upon death, probate estate passes pursuant to the deceased owner’s Last Will and Testament or applicable State Law.

• Upon incapacitation, Guardianship required unless owner has a DPOA.
   

4. Revocable Trust-

• Not subject to probate.

• Upon Grantor’s (owner’s) death, property passes pursuant to Grantor’s Revocable Trust Agreement.

• Upon incapacitation, No Guardianship or DPOA needed because Trustee has title to the property.
   

5. Transfer with a Retained Life Estate-

   • Transfer of real estate to another (i.e., “gift”).

   • Gift subject to transferor’s (i.e., life estate holder) right to use, enjoy, and profit from the real estate during the transferor’s lifetime (i.e., “life estate”).

   • Only available for real estate.

   • Transferor loses control – cannot mortgage or sell without consent from all owners.

   • May trigger mortgage to become due in full.

   • Upon transferor’s death not subject to probate.

   • Upon incapacitation, guardianship required unless transferor has a DPOA.

Your "estate" includes all five (5) methods of ownership, not just your probate estate. The term "estate" is confusing because it is often misused. For example, there is a "probate estate," "trust estate," "gross estate," and just simply "estate." The first is used to describe what goes through probate, the second term describes what is subject to a trust agreement, the next "gross estate" is a tax term, and the last term is used to describe all of your property.