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REAL ESTATE IN CALIFORNIA

COMMON WAYS TO TAKE TITLE

ADVANTAGES & DISADVANTAGES

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

California real property title 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. Person(s) have several options as to how title may be held in each type of ownership. The below summaries reference several common examples of Sole Ownership and Co-ownership.

Sole Ownership

A Single Man/Woman
A single man or woman
Example: John Smith, a single man

A Divorced Man/Woman
A man or woman, having been legally divorced
Example: Jane Smith, 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 Smith, 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 Smith and Jane Smith, husband and wife, as community property
Example: Jane Smith, 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 Smith, 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 Smith and Jane Smith, 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

Rael Property Docs has provided this vesting page as informational purposes only. Property owners who consider changing vesting and/or ownership should seek the consultation of a licensed California real estate attorney and certified public accountant for any possible tax issues or consequences that may arise from transfer.