Joint Tenancy, LLC, or Trust? Choosing How to Own Missouri Real Estate

The deed you sign at closing does more than transfer property. The way title is held decides who controls the property, what happens when an owner dies, and how much risk the owners face from creditors and lawsuits. These choices are simple to make at closing but can be costly to change later.

Homes and Vacation Property

• Sole ownership means title is held in one person’s name. The owner has full control during life, and at death the property passes under the owner’s estate plan or, without one, to their heirs under Missouri law.
• Tenancy in common is Missouri’s default for co-owners who are not married to each other. Ownership shares may be unequal, but if the deed does not say otherwise, the shares are presumed equal. There is no right of survivorship, meaning one owner’s share does not automatically pass to the others at death. Instead, each owner can sell their share or leave it to the beneficiaries of their choice.
• Joint tenancy with right of survivorship must be stated clearly in the deed. When one owner dies, the property passes to the surviving owner(s) without probate. If one owner transfers their share, the joint tenancy can be broken and become a tenancy in common.
• Tenancy by the entirety is available only to married couples and is presumed in Missouri unless the deed says otherwise. It provides survivorship and protects the property from the creditors of only one spouse. The trade-off is that both spouses must agree to sell or mortgage the property.

Revocable trust ownership places title in the name of the trustee of your trust, usually you during your lifetime. You keep full control and can sell, refinance, or change the trust at any time. If you become incapacitated, the successor trustee you chose can manage the property without court involvement, and at death the property passes to your beneficiaries without probate. Married couples can generally keep the creditor protection of tenancy by the entirety by using a properly drafted joint trust.

A beneficiary deed is not a separate form of ownership, but it can be used with most of the forms above. A beneficiary deed lets an owner name who will receive the property at death, avoiding probate. The owner keeps full control during life and can change or revoke it at any time. A will cannot override a recorded beneficiary deed. 

Rental and Investment Property

Holding rental or investment property in your own name can put your personal assets at risk if a tenant, visitor, or contractor makes a claim. For that reason, many owners hold investment property in a limited liability company. An LLC can shield the owner’s personal assets from claims related to the property and offers flexible tax treatment. This protection generally depends on the LLC being operated separately from its owners, and an LLC is not a substitute for insurance. Transferring mortgaged property to an LLC may also allow the lender to require the loan to be paid in full.

An LLC should also be coordinated with your estate plan. Holding property in an LLC does not by itself avoid probate, because the owner’s interest in the LLC is still an asset of the owner’s estate. That interest should be assigned to your trust or otherwise planned for. The operating agreement should address who manages the company if an owner becomes incapacitated or dies, and whether interests can pass to family members.

How These Choices Fit Your Estate Plan

Each form of ownership affects what happens at incapacity and death. Property held in one name, or as a tenant in common, generally goes through probate unless a trust or beneficiary deed is used. Joint tenancy and tenancy by the entirety avoid probate at the first death but only delay it until the surviving owner dies, unless a beneficiary deed is also in place. Adding a child to a deed as a joint tenant can also expose the property to that child’s creditors and create gift tax reporting requirements and higher capital gains taxes when the property is later sold. Other than a trust or an LLC with a well-drafted operating agreement, none of these forms addresses incapacity.

For most families, a revocable trust paired with a durable power of attorney offers the most complete solution. The trust holds the property and avoids probate, and the power of attorney covers assets outside the trust. A beneficiary deed combined with a durable power of attorney can be a simpler alternative. The right choice depends on your family, your property, and your goals.

If you are buying property or want to review how your current property is titled, our attorneys can help you choose a structure that fits your goals.