A deed conveys title to real property from seller to purchaser. Warranty deeds are a type of deed that includes seller warranties regarding title. The term survivorship deed refers to a manner in which multiple purchasers can hold title to property. A warranty deed can also be a survivorship deed if it uses certain vesting language.
Types of Warranty Deeds
Warranty deeds can be either general or special. In a general warranty deed, the seller makes warranties to the purchaser and any future owners that there were no defects in title at the time of sale. Special warranty deeds limit the seller's warranties to problems caused by the seller.
Creating a Survivorship Deed
Survivorship deeds are used when more than one person will own the property. Whenever an individual acquires real estate, he must identify in the deed how he will hold title. A survivorship deed will include the phrase "with rights of survivorship" after the names of the buyers. For example, a deed to an unmarried couple would convey title to "John Buyer, an unmarried individual, and Jane Purchaser, an unmarried individual, as joint tenants with rights of survivorship".
Effect of Survivorship Deed
Absent a survivorship provision in a deed, the interest of a joint owner of real estate passes to his heirs upon death. Under a survivorship deed, the surviving owner automatically becomes the owner of the deceased owner's interest without any probate proceedings. This can make survivorship rights in deeds an effective tool as part of estate planning.
In community-property states, a married couple will usually take title to their primary residence as "community property with rights of survivorship." Community property with rights of survivorship provides a potential tax benefit because the surviving spouse's tax basis in the property increases to the fair market value on the date of the deceased spouse's death. This is called a "step up" in basis. Joint tenants with rights of survivorship may only receive a step up in basis on 50% of the property.