"How should we hold title to the house?"
This question is asked often, and was asked just recently by some first-time buyers who will be closing escrow soon. They are excited about buying their home, but are wise enough to pay attention to the details.
Since I am neither an attorney nor a tax accountant, I gave them a brief run-down of some of the more common choices, and then suggested they get professional advice.
Here in California, some of the more common ways of holding title are:
Tenancy in Common
- any number of persons, with ownership divided into any number of interests, equal or unequal
- each co-owner's interest can be conveyed separately, and passes by will to her heirs
- there is no survivorship right.
- any number of persons, but ownership interests cannot be divided.
- on co-owner's death, his interest ends and cannot be willed
- suvivor owns the property
- only husband and wife, or domestic partners, with equal ownership interests
- separate interests in the property cannot be conveyed
- when co-owner dies, 1/2 goes to survivor; rest goes by will or to others
- only husband and wife, or domestic partners
- ownership interests are equal, and must have been created after certain dates
- upon death of co-owner, survivor owns the property
Luckily, if you make a mistake, or when/if your life situation changes, it is a rather simple procedure to change how title is held. But, giving it your attention now, when you buy a home, is important and will give you peace of mind, knowing you've made an informed decision.