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Common Ways to Hold Title to California Real Estate

There are numerous ways to hold title to California real property.  The best method depends on many factors.  You should consult with your legal, financial and tax advisors before deciding on how to buy, hold and ultimately sell your California real estate.

This web page will give you a quick and concise overview of the most common ways to hold title to real property in California.  California real estate can be held by individuals as sole owners or as co-owners.  Co-ownership of California real estate involves two or more individuals or entities acquiring and holding title together.

Sole Ownership by Person or Entity

A Single Person

An individual who is not and has never been legally married.  Example: Mary Jane Smith, a single woman. 

An Unmarried Person

An individual, who having been married at one time is now legally divorced, or an individual, having been in a registered domestic partnership at one time, that has been legally dissolved.  Example: Mary Jane Smith, an unmarried woman. 

A Married Person or Registered Domestic Partner as their Sole and Separate Property

When a married person or registered domestic partner desires to purchase and hold title to California real estate in his or her name alone.  The spouse or registered domestic partner must generally consent to this by executing and recorded a Quit Claim Deed.  Example: Mary Jane Smith, a married woman, as her sole and separate property or Mary Jane Smith, a registered domestic partner, as her sole and separate property.

A Legal Entity

An entity such as a general partnership, limited partnership, limited liability company, corporation, or other such legal entity.  Example: Exeter Exchange Management Corporation, a California corporation.

Co-Ownership by Person or Entity

Community Property

The California Civil Code defines community property as property purchased either by a husband and wife (or registered domestic partners) together or by a husband or wife (or registered domestic partners) individually.  Real estate acquired and held by a married person is deemed to be community property of the husband and wife unless otherwise stated. 

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 besides his or her spouse.  Example: John Smith and Mary Jane Smith, 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 in the transfer document 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 Smith and Mary Jane Smith, as husband and wife as community property with Rights of Survivorship. 

Joint Tenancy

Joint Tenancy is defined in the California Civil Code as a joint interest owned by two or more persons in equal shares.  The joint tenancy is generally created by a single will or transfer that expressly declares the interest to be joint tenancy. 

The primary benefit of joint tenancy is the right of survivorship.  Title to the real estate will immediately vest in the surviving joint tenant upon the death of a joint tenant without the need to go through probate.  Example: John Smith and Mary Jane Smith, as husband and wife as joint tenants. 

Tenancy-In-Common or "TIC"

Individuals or entities can acquire an undivided percentage interest in a specific real property with each tenant-in-common owner holding a different percentage ownership in the real property.  There is no right of survivorship, and a tenant-in-common interest will not by-pass probate unless held in a Title Holding Trust, Grantor Trust or other method that would by-pass probate.  Example: Mary Jane Smith, a single woman, as to an undivided 25% interest, as tenants-in-common.

Tenancy-In-Partnership

Title held by partners in a partnership.  Ownership interest is in relationship to the interests of each partner in the partnership.  The partners each of equal right of possession, but only for partnership purposes. 

Title Holding Trust or "THT"

Real estate in California can be purchased and held by, and ultimately disposed of through, a Title Holding Trust or Land Trust.  Legal and equitable title to the California real estate is bought and held by the Trustee of the Title Holding Trust.  The Title Holding Trust holds the real property on behalf of the Beneficiary of the trust.  The Beneficiary retains complete control over the trust and has complete power of direction over the trust.  The Trustee can not act without specific written authorization and direction from the Beneficiary(ies).   Example: Exeter Fiduciary Services, LLC, as Trustee, of THT Trust No. XX XXXX. 

Registered Domestic Partners

Registered domestic partners are those individuals that have registered with the California Secretary of State's Domestic Partners Registry.  Ownership and managerial interests are generally equal.  Title is vested in the "community" with each interest being separate but management is unified.  The registered domestic partners each have equal management and control.  Conveyance of real estate requires written consent of both partners.

The above is a concise summary of some of the more common ways to acquire, hold and dispose of real estate in California.  It is provided for informational purposes only and should not be relied upon for legal, financial or tax advice.  There are significant legal and tax implications depending on how you choose to hold title to your real property.  You should consult with your legal, financial or tax advisors before making a decison on how you will hold title to California real estate. 

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