Real Estate Title in California
- A Single Person: An individual who is not and has never been legally married. Example: Jane Doe, a single woman.
- An Unmarried Person: An individual who was previously married but not legally divorced, or who has been in a registered domestic partnership that has been legally dissolved. Example: Jane Doe, an unmarried woman.
- A Married Person (or Registered Domestic Partner) as their Sole and Separate Property: When a person is married or has a registered domestic partner and desires to purchase, they can hold title to California real estate in his or her name alone. Usually the spouse or registered domestic partner provides consents to this by executing and recording a Quit Claim Deed. 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: An entity such as a corporation, LLC, partnership or other such legal entity. Example: Dawson Engineering, Inc., a California corporation.
- Transfer on Death: California now allows for an owner of certain real property to hold title in a Transfer on Death Deed. This means that real property ownership is retained with the owner until such time as the owner dies. A Transfer on Death deed allows for the property to transfer to a designated beneficiary named in the deed and avoids probate or the necessity of setting up a Living Trust.
- Revocable Living Trust: Real estate in California can be held by a revocable living trust. Title to the California real estate is held by the Trustee or Trustees of the trust who retains complete control over the trust and has complete power of direction over the real property. Holding title to real property held by a trust will allow the transfer to the beneficiaries of the trust after the death of the trustee without the need to go through probate. Example: Jane Doe, Trustee of the Jane Doe Revocable Trust under Declaration of Trust dated March 1, 2009.
- Co-Ownership by Person or Entity: Co-ownership means that the property is owned by more than one person or entity. There are several different types of co-ownership. The two most common are joint tenancy and tenancy-in-common.
Joint Tenancy : California Civil Code defines joint tenancy as a joint interest owned by two or more persons in equal shares. The joint tenancy can be created by a 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 transfer to the surviving joint tenant upon the death of a joint tenant without the need to go through probate.
Tenants-in-Common: When title is held as tenants-in-common, individuals or entities own an identified and specific percentage interest in a certain real property. Each tenant-in-common owner can hold a different percentage ownership in the real property. With tenants-in-common, there is no right of survivorship, and a tenant-in-common interest will not bypass probate.
- Community Property with Rights of Survivorship: When property is expressly declared in the transfer document to be community property with rights of survivorship, the property will, upon the death of one of the spouses (or registered domestic partners), pass to the survivor without going through probate. Example: James Friedman and Sally Friedman, as husband and wife as community property with Rights of Survivorship. Click here for more information about the differences between holding property as community property with rights of survivorship as compared to joint tenancy as explained below.
- Joint Tenancy: California Civil Code defines joint tenancy as a joint interest owned by two or more persons in equal shares. The joint tenancy can be created by a 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 transfer to the surviving joint tenant upon the death of a joint tenant without the need to go through probate. Example: James Friedman and Sally Friedman, husband and wife as joint tenants.
- Tenants-In-Common: Individuals or entities can acquire an identified and specific percentage interest in a certain real property. Each tenant-in-common owner can hold different percentage ownerships in the real property. With tenants-in-common, there is no right of survivorship, and a tenant-in-common interest will not bypass probate. Example: Jane Doe, a single woman, as to an undivided 50% interest, and Mark Doe, a single man as to an undivided 50% interest, as tenants-in-common.
These are just 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. Since there are significant legal and tax implications depending on how you choose to hold title to your real property, you should consult with an attorney before deciding on how you will hold title to California real estate.
To learn about the different types of transfer deeds available in California, click here.
California Property FAQs
A Grant Deed transfers title ownership of real property from the current owner to the new owner. A deed can also relinquish a co-owner’s interest in real property to another existing co-owner. When a person or entity purchases real property, a Grant Deed is recorded showing them as the new owner of the property.
On the other hand, a Deed of Trust reflects loans against real property. In this regard, rather than addressing “title” to the property, a Deed of Trust addresses lien hold interests in real property. A Deed of Trust is recorded to secure repayment of a debt between a bank lien holder (lender) and the actual titleholder/owner of the property. The recorded deed of trust has priority over other recorded deeds of trust on the same property based on when they were recorded. For example, a deed of trust recorded January 1, 2017 would have priority over a later deed of trust recorded March 3, 2017. When a bank loans money to a buyer money to buy a home, the homeowner signs a deed of trust. This Deed of Trust is then recorded on the property to memorialize the loan and secure the loan.
In real property transactions, a beneficiary typically refers to the lender or bank who is named in a Deed of Trust. Every Deed of Trust will identify a named beneficiary who typically receives the deed of trust in exchange for their loaning money to a homeowner. In real estate transactions, the beneficiary list on a deed of trust is usually a bank; however an individual person can also be listed as a beneficiary. The deed of trust identifies the basic terms of the loan, such as the amount borrowed from the beneficiary/lender.