Property Ownership: The Parts May Be Worth More Than the Whole

In medieval England, when levels of sophistication were somewhat lower than they are today, landowners had difficulty grasping the concept of owning and transferring land.  When they sold land to someone else, they ceremonially handed over a fistful of turf or twigs to the buyer – just to make sure everyone understood what was happening.

Property ownership is better understood these days, but many people forget that when they own property, they actually possess a whole “bundle of rights” that they can hold, divide up, sell, rent or give away.  Mineral rights to a piece of land, for example, can be sold or leased, leaving the owner with the other property rights intact.

You can put real estate, or other property, into a trust and divide up the benefits from the property into life income interests and “remainder” interests (the “remaindermen” will benefit only after the deaths of the life income beneficiaries).  You can transfer a home or farm to another person but keep all rights to the property during your life.  You are said to have a “life estate” and the other person has a “remainder interest.”  You even can give or sell a share of all your ownership rights to someone else – a one-twelfth interest in a condominium, for example.