Title & Vesting Options for Home Buyers in California

One of the decisions that a buyer has to make when purchasing a home is how they will take title. Below is a handy chart that describes the more common ways of taking title, and some of the implications for each form of taking title.

Important Note: How you take title can have important legal and financial consequences. I am not an accountant or otherwise qualified to provide tax advice. I am also not an attorney or otherwise qualified to provide legal advice. Always consult your favorite accountant/financial advisor/tax specialist/attorney to make sure that you are taking title to property in a way that is best suited to your specific circumstances. 

Tenancy in Common
Joint Tenancy
Community Property
Community Property With Right of Survivorship
Who Can Hold Title This Way 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
How is it Divided? 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
How is it Created? 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
How can a co-owner’s interest be Transferred? 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
How does this impact the creations of liens by other co-owners against the property?
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
What happens when a co-owner dies? 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 Survivorshipâ€) 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
Some possible advantages or disadvantages to taking title in this way may be…  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

Information in this table is based upon “Ways To Take Title of Real Estate in California.”

Comments

  1. Bob says

    what is the the difference and consequences of a property title vested in the name of a man as marred versus a title vested in the name of a man as a married man as his sole aand separate property in case of forclosure and creditor loan payment.

  2. says

    Bob –

    I don’t know the answer to that one. You’d want to talk to a tax attorney, or someone in the legal/financial world with expertise in foreclosure and credit law. Good luck, although the circumstances don’t sound great.

    My hunch is that sole and separate property would keep the credit impacts to that individual vs negative credit reporting about both parties. But again, I honestly don’t know.

    - Matt

Leave a Reply