There are several ways to hold title to property. Your decision has many legal consequences that can affect you and your heirs. Each buyer's situation is different. Please seek legal advice from a real estate attorney before making this important decision, as property laws vary by state and territory.
Below are a few examples of some of the most common ways title can be held.
Sole individual ownership
The simplest way to hold title to a property is called sole individual ownership. Sole ownership means that one individual person alone holds title to the property.
Tenancy by the entirety
The USVI allows joint ownership of a property by a married couple called tenancy by the entirety. In this type of ownership, an owner cannot make any decisions about the property without the other’s consent. Each of the married partners has full rights to the property should the other spouse die. The only way to sever this kind of ownership is by divorce or death.
1. Simple. Ownership is easy to prove, as the names of the married owners are on the deed.
2. Loan terms. Just like single individuals, married couples have more favorable mortgage loan terms than businesses.
3. Partial avoidance of probate. After the first spouse passes away, the surviving spouse does not need to probate the deceased spouse's estate to gain title to the property. Title is automatically vested in the surviving spouse upon the death of the deceased spouse and proof of ownership is demonstrated by recording a certified copy of the deceased spouse's death certificate.
1. High liability. Exposure to personal liability for injuries or harm to third parties on the property is shared by the married couple. Taking title this way is not recommended if the property is going to be used for investment or rental purposes.
2. Not inheritable. It is not possible to predict which spouse will pass first. The surviving spouse will have total ownership and control of the property, including the ability to sell the property. This can be troublesome for couples who have children from previous marriages and want their children to be able to inherit their property. The spouses have to trust that their wishes will be honored by their spouse should they be the first to pass away.
3. Probate is inevitable. The surviving spouse’s interest in the property is subject to probate when the surviving spouse dies. Probate is required, regardless of the existence of a will.
Joint tenancy with right of survivorship
Joint tenancy with right of survivorship means two or more people (other than a married couple) hold title to the property together. If one person dies, the ownership automatically defers to the remaining owner(s). If any of the owners sell their interest in the property, the tenancy is broken and the new owner becomes a tenant in common with the existing owner(s).
1. Simple. Ownership is easy to prove, as the names of the owners are on the deed.
2. Loan terms. Just like single individuals, owners have more favorable mortgage loan terms than businesses.
3. Partial avoidance of probate. After the first owner passes away, the surviving owners do not need to probate the deceased owner's estate to gain title to the property. Title is automatically vested in the surviving owners upon the death of the deceased owner and proof of ownership is demonstrated by recording a certified copy of the deceased owner's death certificate.
1. High liability. Exposure to personal liability for injuries or harm to third parties on the property is shared by the owners. Taking title this way is not recommended if the property is going to be used for investment or rental purposes.
2. Not inheritable. It is not possible to predict which owner will pass first. The surviving owners will have total ownership and control of the property, including the ability to sell the property. This can be troublesome for owners who have children and want their children to be able to inherit their property.
3. Probate is inevitable. The last surviving owner's interest in the property is subject to probate when that owner dies.
Tenancy in common
Tenancy in common allows multiple owners to each own a percentage of a property. In this form of holding title to the property, an owner can sell his or her percentage share of the property at any time. Owners also can will their share to their heirs. The property does not revert to the other owners automatically if one of the owners dies.
2. Loan terms. Individual consumers have more favorable mortgage loan terms than businesses.
3. Inheritable. Individual owners can prepare estate plans to decide who will get the property after they die.
1. High liability. Exposure to personal liability for injuries or harm to third parties related to the property is shared by all owners.
2. Difficult management. Partial ownership interests in real estate make it challenging to manage the property. Consent of all owners is required for loans. It may be difficult to get all owners to contribute financially to the upkeep of the property.
3. Multiple probates. When a fractional interest owner dies, their fractional interest is subject to probate. Clearing title to enable the owners to sell the property can be prohibitively expensive if partial interests are tied up in probate proceedings for years.
Revocable Living Trust
Property can be transferred into a revocable living trust, which shields the property from probate when the owner(s) dies. However, there is some cost to setting up and maintaining the trust. An estate attorney can assist in establishing a trust.
1. Avoid probate. There is no need for your beneficiaries to spend years in court waiting for the court to title the real estate in their names. The successor trustee can make those transfers as governed by the trust agreement.
2. Avoid transfer tax. If the property is currently titled in individual or married names, there is no stamp tax owed to transfer the property into a revocable living trust.
3. Loan terms. Revocable trusts can receive loans with the same favorable terms as individual consumers.
1. Cost. There are legal fees associated with the preparation of a trust. These fees are typically several thousand dollars.
2. High liability. Exposure to personal liability for injuries or harm to third parties on the property is shared by the settlor(s) of the trust.
Limited Liability Company
A limited liability company can own property in the U.S. Virgin Islands. An LLC shields the personal assets of the owner(s) of the LLC from claims made by third parties. However, unless the buyer is paying cash for the property, it can be difficult to title real estate in the name of an LLC.
1. Liability shield. Shields the individual owners from personal liability to third parties on the property for injuries or harm.
2. Tax savings. Stamp tax can potentially be avoided by transferring membership interests to buyers instead of title to real estate.
3. Privacy. The ultimate owners of the LLC do not need to be named in the deed.
1. Cost. The are legal fees associated with the formation of an LLC. There are ongoing annual fees owned to the USVI government to keep the entity in good standing.
2. Loan terms. Loan terms are commercial terms, which means the interest rate is likely going to be higher than a consumer loan and the repayment period is likely going to be much shorter.
3. Transfer tax. If you already have title to the property in your individual name, you will be required to pay stamp tax when transferring title to the LLC. The tax ranges from 2-3.5% of the assessed value of the property and is owed at the time of the transfer. Many people do not have that amount of cash on hand.
4. Membership interests may be subject to probate. If members own their interests in their individual names, their membership interests will be subject to the probate process, which can have long-lasting effects on the LLC's ability to transfer title to the real estate.
Please consult with an attorney to discuss your situation to determine the best way for you to take title to real estate in the USVI.
No, there is not a statutory form in the USVI.
Yes. 15 V.I.C. §1262.
Any individual 18 years or older who has the capacity to contract may serve as agent.
The power of attorney must be in writing. 15 V.I.C. § 1262. If the power of attorney is used to execute documents associated with real property, the power of attorney must be in writing and executed in the presence of two witnesses who must subscribe their names to the same as such. 28 V.I.C. § 241 et seq. If executed in the USVI, the principal’s signature must be validly acknowledged by a notary public authorized to perform notarial acts in the USVI. Id. at § 81. For powers of attorney executed outside the USVI, compliance with the requirements for recording in the jurisdiction of execution will suffice to allow for recording in the USVI; alternatively, compliance with USVI requirements (two witnesses and an acknowledgement by a notary from the jurisdiction of execution) will entitle the instrument to be recorded. Id. at § 90. The notary may act as a witness, but if doing so, must sign as such in addition to the notarial acknowledgement. See Alexander v. Alexander, 65 V.I. 372 (VI 2016) (where notary did not sign deed as a witness until seven years after deed was originally signed, deed was invalid). The USVI places great importance on the valid execution and acknowledgement of a power of attorney.
Even if the power of attorney is not used to execute documents associated with real property, it is advisable to execute all legal documents in the presence of two witnesses and a notary.
The durable nature of the power of attorney must be expressly stated in the power of attorney. 15 V.I.C. § 1262-1263. If the language in the power of attorney indicates that subsequent disability or incapacity does not affect the power of attorney or if the language states that the power of attorney becomes effective upon disability or incapacity, the power of attorney is durable and disability or incapacity does not affect it. Id. at § 1262-1263.
A power of attorney is not revoked unless and until the agent has actual knowledge of the revocation. 15 V.I.C. § 1265. If the principal is living and of sound mind, then the power of attorney may be revoked by the principal and is accomplished by the principal notifying the agent of the revocation. Although there is no law addressing whether the notification of revocation can be oral or must be in writing, the general practice is to notify the agent of the revocation through a writing signed by the principal and delivered to the agent by certified mail.
If the principal is incapacitated, the power of attorney (if not a durable POA) is revoked when the agent has actual knowledge of the principal’s disability or incapacity. 15 V.I.C. § 1265(b)). If the principal is no longer living, revocation occurs when the agent has actual knowledge of the death of the principal. 15 V.I.C. § 1265(a)).
No, there is not a statutory form.
The authority granted becomes effective according to the terms of the writing. 19 V.I.C. § 207.
Yes. “Health care” means any care, treatment, service, or procedure to maintain, diagnose, or treat an individual’s physical or mental condition. 19 V.I.C. § 202.
An adult may serve as agent. 19 V.I.C. § 203. A minor may serve as agent under the following conditions: 1. The minor is emancipated or has attained the age of 17 years and, regardless of the source of income, is living apart from his parents or from an individual in loco parentis and is managing his own affairs; 2. The minor is or has been married; or 3. The minor is in the military service of the United States. 19 V.I.C. § 203. There is no prohibition against the attending doctor serving as agent, but the practice is discouraged.
An appointment and any amendment thereto must be in writing, signed by the appointor and a witness other than the health care representative and accepted in writing by the health care representative. 19 V.I.C. § 207.
Yes. 19 V.I.C. § 207.
Unless expressly provided otherwise, the authority granted in the writing is not affected if the appointor becomes incapable of consenting. 19 V.I.C. § 207(f).
Unless the writing provides otherwise, a health care representative appointed under this section, who is reasonably available and willing to act, has priority to act for the appointor in all matters of health care. 19 V.I.C. § 207(g).
Yes, a living will in included: “A living will is an advance directive by a competent person which expresses a wish not to receive certain artificial means of support in the event that he or she is later unable to make such a wish known in the future due to medical incapacity. Such a procedure is recognized in the Virgin Islands by the enactment of the Uniform Durable Power of Attorney Act.” Id.
Ronan v. Clarke, 63 V.I. 95, 100 (Super. Ct. 2015)
No, there is not a statutory form. A person becomes a guardian of a minor by parental appointment or upon appointment by the Court. 15 V.I.C. § 5-201. A guardian may be appointed by will or other signed writing by a parent for any minor child the parent has or may have in the future. 15 V.I.C. § 5-202(a).
The appointment of a guardian becomes effective upon the appointing parent’s death, adjudication that the parent is an incapacitated person, or a written determination by a physician who has examined the parent that the parent is no longer able to care for the child, whichever first occurs. 15 V.I.C. § 5-202(c).
Yes, see above for triggering events. The Virgin Islands Uniform Guardianship and Protective Proceedings Act (15 V.I.C. § 5-101, et. seq.) governs when a guardianship appointment becomes effective.
The appointment of a guardian terminates upon the death, resignation, or removal of the guardian or upon termination of the guardianship. 15 V.I.C. § 5-112. A resignation of a guardian is effective when approved by the Court. Id. at § 5-112.
A parental or spousal appointment as guardian under an informally probated will terminates if the will is later denied probate in a formal proceeding. Id.
Eligibility for guardianship is determined by the Court upon issuing letters of guardianship pursuant to 15 V.I.C. § 5-110.
More than one person may serve as guardian. 15 V.I.C. § 5-112(c).
“Guardian” is defined in the Virgin Islands Uniform Guardianship and Protective Proceedings Act (15 V.I.C. § 5-101, et. seq.) as a “person who has qualified as a guardian of a minor or incapacitated person pursuant to appointment by a parent or spouse, or by the Court.” Id. at § 5-102(3). The term includes a limited, emergency, and temporary substitute guardian, but not a guardian ad litem. Id. There is no law defining the term “standby guardian.”
Consent of the non-designating parent is not required. Until the Court has confirmed a guardian under 15 V.I.C. § 5-202, the non-designating parent may prevent or terminate the appointment at any time by: (1) filing a written objection in the court in which the appointing instrument is filed, and (2) giving notice of the objection to the guardian and any other persons entitled to notice of the acceptance of the appointment. The objection, however, does not necessarily preclude judicial appointment of the person selected by the parent. 15 V.I.C. § 5-203.
The appointment of a guardian by a parent does not supersede the parental rights of either parent. 15 V.I.C. § 5-202. If both parents are dead or have been adjudged incapacitated persons, an appointment by the last parent who died or was adjudged incapacitated has priority. Id. at § 5-202.
A guardian may be appointed by will or other signed writing by a parent for any minor child the parent has or may have in the future.
15 V.I.C. § 5-202(a). If the guardian is appointed by will, then the formalities for execution of a will must be followed. See 15 V.I.C. §§ 13 and 14.
There is no law on whether a witness to the will can be nominated as guardian.
There is no law governing execution formalities for appointment of a guardian by a parent of a minor child by a signed writing other than a will. If a parent elects to appoint a guardian by a signed writing other than a will, then the conservative approach would be to follow the same execution formalities required for a will.
The Guardian does not have to sign; however, the Guardian does not become eligible to act on behalf of the minor until the guardian files of an acceptance of appointment, which must be filed within 30 days after the guardian's appointment becomes effective. 15 V.I.C. § 5-202(d).
No, however the appointment may specify the desired limitations on the powers to be given to the guardian. 15 V.I.C. § 5-202(a).
The court does not have to confirm the appointment of a guardian before the guardianship is effective (see 15 V.I.C. § 5-202(c)), but the guardian does not become eligible to act on behalf of the minor until the filing of an acceptance of appointment, which must be filed within 30 days after the guardian's appointment becomes effective. 15 V.I.C. § 5-202(d).
The guardian shall:
(1) file the acceptance of appointment and a copy of the will with the court of the judicial division in which the will was or could be probated or, in the case of another appointing instrument, file the acceptance of appointment and the appointing instrument with the Court of the judicial division in which the minor resides or is present; and
(2) give written notice of the acceptance of appointment to the appointing parent, if living, the minor, if the minor has attained 14 years of age, and a person other than the parent having care and custody of the minor. 15 V.I.C. § 5-202(d).
If the parent has designated a Guardian in his or her will, then the procedure for probate of wills must be followed. The initial step in the administration of the estate of a person who died testate is the filing of the petition for probate of the will and for issuance of letters testamentary, approving appointment of an executor or administrator authorized to administer the estate. V.I. R. Prob. Rule 3. The petition may contain a request for an appointment of a guardian for such heirs or next of kin who may be minors. V.I. R. Prob. Rule 3(c)(2).
Until the Court has confirmed an appointee under 15 V.I.C. § 5-202, a minor who is the subject of an appointment by a parent and who has attained 14 years of age may prevent or terminate the appointment at any time by filing a written objection in the court in which the appointing instrument is filed and giving notice of the objection to the guardian and any other persons entitled to notice of the acceptance of the appointment. The objection does not preclude judicial appointment of the person selected by the parent. 15 V.I.C. § 5-203.
The guardianship continues until terminated, without regard to the location of the guardian or minor ward. 15 V.I.C. § 5-201.
Termination of the appointment of a guardian or conservator does not affect the liability of either for previous acts or the obligation to account for money and other assets of the ward or protected person. Id.
A parent or guardian of a minor or incapacitated person, by a power of attorney, may delegate to another person, for a period not exceeding six months, any power regarding care, custody, or property of the minor or ward, except the power to consent to marriage or adoption. 15 V.I.C. § 5-105.
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