6 Ways to Hold Title in California
Holding title to property is legal ownership. It gives you the right to possess, use, enjoy, sell, or transfer it. In California, there are several ways to hold title to property. The most common ways are sole ownership, tenancy in common, joint tenancy, community property, community property with the right of survivorship, and a living trust.
You have options when you hold title on property in California.
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Sole ownership means that one person owns the property. This is the simplest way to hold title. As a sole owner, you have the ability to sell the property without the need for consent from anyone else. You can also take out a mortgage on the property without needing the consent of any other owners. Upon your death, the property will be passed on to your heirs or designated beneficiaries according to your will or other estate planning documents.
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Tenancy in common means that two or more people own the property together. The owners in a tenancy in common can have unequal ownership shares in the property, depending on how they agree to hold title. In a tenancy in common, the deceased owner's share will pass according to their will or through intestate succession laws if they don't have a will. In a tenancy in common, each owner has the right to sell or transfer their interest in the property without the consent of the other owners. Each owner is only liable for their own share of the property, so if one owner is sued, only their share can be used to satisfy the judgment.
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Joint tenancy means that two or more people own the property together, and they each have an equal share. However, if one owner dies, their share automatically goes to the other owners. This is called the right of survivorship. Some other implications of holding title as joint tenancy with the right of survivorship is that a joint tenant cannot sell or transfer their share of the property without the consent of the other owners. Additionally, each owner is jointly and severally liable for any debts or liens against the property, including those incurred by other owners.
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Holding title as community property in California means that the property is owned equally by both spouses and each spouse has a one-half interest in the property. If one spouse dies, their one-half interest in the property will be distributed according to their will or through the laws of intestate succession if there is no will.
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Holding title as community property with the right of survivorship also means that the property is owned equally by both spouses and each spouse has a one-half interest in the property, but with the added feature that if one spouse dies, their one-half interest in the property automatically passes to the surviving spouse outside of probate. The right of survivorship is a key difference between the two forms of community property and should be fully understood before making a decision.
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A living trust is a legal document that allows you to control your property after you die. With a living trust, you can name a trustee to manage your property and distribute it to your beneficiaries according to your wishes. When your property is held in a trust it can pass to the beneficiaries named in the trust outside of probate, which can save time and money and is private and confidential. Living trusts can be used for a variety of purposes, such as estate planning, tax planning, and asset protection. It's important to note that creating a living trust involves some upfront costs, such as legal fees and recording fees.
The best way to hold title to property depends on your individual circumstances. If you are unsure which way is right for you, it is important to speak with an attorney.
