FAQ: How should we hold title to our property?
First, I must tell you I am neither an attorney nor a C.P.A. and can't give you specific advice about what is best for you and your particular situation. I can, however, give you the following recap about some of the ways of holding title that are commonly used in California when more than one person owns property:
- Tenancy in Common - ownership can be divided into any number of interests; interests don't have to be equal; each co-owner has a separate legal title to his/her undivided interest and each interest may be conveyed separately. Upon co-owner's death, his interest passes by will to his heirs. There is no right of survivorship.
- Joint Tenancy - ownership interests cannot be divided; there is only one title to the whole property; all parties have equal right of possession. Conveyance by one co-owner without the others breaks the joint tenancy. Upon co-owner's death, her interest ends and cannot be willed; the survivor owns the property by survivorship.
- Community Property - available only to husband and wife or domestic partners; equal ownership interests and equal right of possession; separate interests cannot be conveyed.
- Community Property with Right of Survivorship - a blend of Joint Tenancy and Community Property, this is available to husband and wife when interest is created on or after 7/1/2001, or domestic partners created on or after 1/1/05. Similar to community property, but upon a co-owner's death, decedent's interest ends and cannot be willed.
To learn what's right for you, and the differences in tax treatment, consult your attorney or C.P.A.