Ways to Take Title of Real Estate in California

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Common ways to take title to California residential property: Advantages and Limitations

 

Tenancy in Common

Joint Tenancy

Community Property

Community Property

With Right of Survivorship

Parties

Two or more persons (may be spouses or domestic partners)

Two or more persons (may be spouses or domestic partners)

Spouses or domestic partners

Spouses or domestic partners

Division

Ownership can be divided into any number of interests, equal or unequal

Ownership interests must be equal

Ownership interests must be equal

Ownership interests must be equal

Creation

One or more conveyances (law presumes interests are equal if not otherwise specified)

Single conveyances (creating identical interests); vesting must specify joint tenancy

Presumption from marriage or domestic partnership or can be designated in deed

Single conveyance and spouses or domestic partners must indicate consent which can be on deed

Possession and control

Equal

Equal

Equal

Equal

Transferability

Each co-owner may transfer or mortgage their interest separately

Each co-owner may transfer his/her interest separately but tenancy in common results

Both spouses or domestic partners must consent to transfer or mortgage

Both spouses or domestic partners must consent to transfer or mortgage

Liens against one owner

Unless married or domestic partners, co-owner’s interest not subject to liens of other debtor/ owner but forced sale can occur

Co-owner’s interest not subject to liens of other debtor/owner but forced sale can occur if prior to co-owner’s/debtor’s death

Entire property may be subject to forced sale to satisfy debt of either spouse or domestic partner

Entire property subject to forced sale to satisfy debt of either spouse or domestic partner

Death of co-owner

Decedent’s interest passes to his/her devisees or heirs by will or intestacy

Decedent’s interest automatically passes to surviving joint tenant

(“Right of Survivorship”)

Decedent’s 1/2 interest passes to surviving spouse or domestic partner unless otherwise devised by will

Decedent’s 1/2 interest automatically passes to surviving spouse or domestic partner due to right of survivorship

Possible advantages/disadvantages

Co-owners interests may be separately transferable

Right of Survivorship (avoids probate); may have tax disadvantages for spouses

Qualified survivorship rights; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage

Right of survivorship; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage

 

Description of Vesting/Title Options

Title to real property in California may be held by individuals, either in Sole Ownership or in Co-ownership. Co-ownership of real property occurs when title is held by two or more persons. There are several variations as to how title may be held in each type of ownership. The following brief summaries reference eight of the more common examples of Sole Ownership and Co-ownership.

Sole Ownership

A Single Man/Woman

A single man or woman

Example:  John Doe, a single man

A Divorced Man/Woman

A man or woman, having been legally divorced

Example: Jane, an unmarried woman

A Married Man/Woman, as His/Her Sole & Separate Property

When a married man or woman wishes to acquire title as their sole and separate property, the spouse must consent and relinquish all right, title and interest in the property by deed or other written agreement

Example: John, a married man, as his sole and separate property

Co-Ownership

Community Property

Property acquired by a married couple, or either spouse during marriage, other than by gift, bequest, devise, descent or as the separate property of either, is presumed community property

Example: John and Mary, husband and wife, as community property

Example: Jane, a married woman

Tenancy in Common

Under tenancy in common, the co-owners own undivided interests, but unlike joint tenancy, there is no right of survivorship; each tenant owns an interest which on his or her death vests in his or her heirs or devisee

Example: John, a single man as to an undivided 1/4th interest as tenants in common

Community Property with Right of Survivorship

Community property acquired by a married couple when expressly declared in the transfer document to be “community property with right of survivorship,” shall pass to the surviving spouse without having to first pass through the administration of the estate

Joint Tenancy

Joint and equal interest in land owned by two or more individuals created under a single instrument with right of survivorship

Example: John and Mary, husband and wife, as joint tenants

Trust

Title to real property in California may be held by a trustee in trust; the trustee of the trust holds title pursuant to the terms of the trust for the benefit of the trustor/beneficiary

How to Protect Your Interests

Make sure your real estate agent informs you of the potential advantages and disadvantages of each vesting options. (See also common problems with property titles and resolutions). Alternatively, you may wish to have your purchase agreement be checked by a private real estate attorney, or have him/her representing you during any proceedings.

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