There are many different ways for people to hold
title to property in California. You
should always consult with an attorney before deciding on how to hold title to California
real property.
California real property can be held by people as a
sole owner or as a co-owner with another person. Co-ownership of California real property
involves two or more persons or entities acquiring and holding title together.
Sole Ownership by Person or Entity
·
A Single Person
Property would be held as an individual who is not
and has never been legally married.
Example: Jane Doe, a single woman.
·
An Unmarried Person
Property would be held as an individual, who was
married at one time but is now legally divorced; or an individual, having been a
registered domestic partnership at one time, but the partnership is now legally
dissolved. Example: Jane Doe, an
unmarried woman.
·
A Married Person or Registered Domestic
Partner as their Sole and Separate Property
Property would be held this way when a married individual
or registered domestic partner desires to purchase and hold title to California
real property solely in his or her name.
The spouse or registered domestic partner must generally consent to this
by executing and recorded a Quit Claim Deed for the property in question. Example: Jane Doe, a married woman, as her
sole and separate property or Jane Doe, a registered domestic partner, as her
sole and separate property.
A Legal Entity
Examples of entities that can hold title to property
are:
- Corporations
- General partnerships
- Limited partnerships
- Limited liability companies
- Other legal entities
Example: XYZ Managing Corporation, a California Corporation.
Co-Ownership by Person or Entity
·
Community Property
California Civil Code defines community property as
property acquired by a husband and wife, or registered domestic partners,
together or by a husband or wife, or registered domestic partners, individually
during the marriage. Real estate
acquired and held by a married person or registered domestic partners is deemed
to be community property of the husband and wife, or both partners, unless
otherwise stated and agreed to in writing by the spouse or partner who will not
be on title.
The husband and wife, or registered domestic
partners, both have the right to dispose of one-half of the community property
under community property law. The
one-half of the community property will automatically go to the surviving
spouse if the deceased spouse did not otherwise disposed of the community
property to someone other than his or her spouse. Example: John Doe and Jane Doe, as husband
and wife as community property.
·
Community Property with Rights of
Survivorship
Community property of a husband and wife, or
registered domestic partners, when expressly declared on title to be community
property with rights of survivorship, shall, upon the death of one of the
spouses, or registered domestic partners, pass to the survivor without going
through probate. Example: John Doe and Jane
Doe, as husband and wife as community property with rights of survivorship.
·
Joint Tenancy
California Civil Code defines joint tenancy as a
joint interest owned by two or more persons in equal shares. Title is usually taken as joint tenancy when
the real property is acquired. However,
joint tenancy can also be created by a transfer that expressly declares the
interest in the real property to be joint tenancy.
The most important benefit of joint tenancy is the
right of survivorship. Title to real
property will immediately pass to the surviving joint tenant upon the death of
a joint tenant without the need to go through probate. Any two or more people may hold title as
joint tenants and they do not need to be married or registered domestic
partners to hold title this way (and gain the benefit of right of
survivorship). Example: John Doe and Jane
Roe, as joint tenants.
·
Tenants in Common (TIC)
Individuals or entities may acquire an undivided
percentage interest in a specific piece of real property with each
tenant-in-common holding a different percentage ownership in the real
property. There is no right of
survivorship, and a tenant-in-common’s interest will not automatically avoid
probate by right of survivorship unless held in Trust or some other method that
would avoid probate. Example: Jane Doe,
a single woman, as to an undivided 50% interest, as tenants-in-common.
·
Title Holding Trust (THT)
Real estate in California can be acquired and held
by a Title Holding Trust or Land Trust.
Legal and equitable title to the California real property is bought and
held by the Trustee of the Title Holding Trust.
The Title Holding Trust holds the property on behalf of the beneficiary
of the trust. The beneficiary retains control
over the trust and has total power of direction over the trust. The trustee cannot act without explicit
written authorization and direction from the beneficiary or beneficiaries. Example: Trust Financial Services, LLC, as
Trustee, of THT Trust No. 12 3456.
The above is a summary of the more common ways to
acquire and hold real property in California.
It is provided for general informational purposes only and should not be
relied upon for legal advice. There are
significant legal and tax implications depending on how you choose to hold
title to real property. You should
consult with a legal advisor before making any decisions on how you or you and
your spouse or partner (or you and another individual) will hold title to real
property in California.
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