Ways of Taking Title
Advantages & Limitations:
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.
A Single Man/Woman:
A man or woman who is not legally married. Example: John Doe, a single man.
An Unmarried Man/Woman:
A man or woman, who is legally divorced. Example: John Doe, an unmarried man.
A Married Man/Woman, as His/Her Sole and Separate Property:
When a married man or woman wishes to acquire title in his or her name alone, the spouse must consent, by quitclaim deed or otherwise, to the transfer thereby relinquishing all right, title and interest in the property.
The California Civil code defines community property as property acquired by husband and wife, or either, during marriage, when not acquired as the separate property of either. Real property conveyed to a married man or woman is presumed to be community property, unless otherwise stated. Under community property, both spouses have the right to dispose of one half of the community property by will, but if there is no will, all of the property will go to the surviving spouse without administration. If a spouse exercises his/her right to dispose of one-half, that half is subject to administration in the estate. Example: John Doe & Mary Doe, husband and wife, as community property. Example: John Doe & Mary Doe, husband and wife. Example: John Doe, a married man.
A joint tenancy estate is defined in the Civil Code as Follows: “A joint interest is one owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be joint tenancy.” A chief characteristic of joint tenancy property is the right of survivorship. When a joint tenant dies, title to the property immediately vests in the surviving joint tenant(s). As a consequence, joint tenancy property is not subject to disposition by will. Example: John Doe and Mary Doe, husband and wife, as joint tenants.
Tenancy In Common:
Under tenancy in common, the co-owners own undivided interests but, unlike joint tenancy, the interests need not be equal in quantity or duration, and may arise at different times. 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 Doe, a single man, as to an undivided 3/4ths interest, and George Smith, a single man, as to and undivided 1/4th interest, as tenants in common.
Title to real property in California may be held in a title holding trust. The trust holds legal and equitable title to the real estate. The trustee holds title for the benefit of the trustor/beneficiary who retains all of the management rights and responsibilities.
Community Property with Right of Survivorship:
This has the same attributes as the traditional community property form of title but, like joint tenancy, has the additional attribute of the right of survivorship. When a husband and wife hold title as Community Property with Right of Survivorship the full interest in the property will vest, by law, in the surviving spouse immediately upon the death of the first spouse.
The preceding is provided for informational purposes only. For a more comprehensive understanding of the legal and tax consequences, appropriate consultation is recommended. There are significant tax and legal consequences on how you hold title.