Page 30 - Homeowners Manual - San Luis Obispo County

COMMON WAYS OF HOLDING TITLE

How should I take ownership of the property I am buying?
The form of ownership taken (the vesting of title) will determine who may sign various documents involving the
property and future rights of the parties to the transaction. These rights involve such matters as: real property
taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor’s claims. Also, how
title is vested can have significant probate implications in the event of death.

Buyers may wish to consult legal counsel to determine the most advantageous form of ownership for their
particular situation, especially in cases of multiple owners of a single property.

Following is a brief list of common says to hold title:

Sole Ownership – Sole ownership may be described as ownership by an individual or other entity capable of
acquiring title. Examples of common vesting cases of sole ownership are:

1. A Single Man/Woman: A man or woman who is not legally married or in a domestic partnership. For
example: Bruce Buyer, a single man.

2. A Married Man, Woman as His/ Her Sole and Separate Property: A married man or woman who wishes
to acquire title in his or her name alone.

The title company insuring title will require the spouse of the married man or woman acquiring title to
specifically disclaim or relinquish his or her right, title and interest to the property. This establishes that both
spouses want title to the property to be granted to one spouse as that spouse’s sole and separate property.
For example: Bruce Buyer, a married man, as his sole and separate property.

Co-Ownership – Title to property owned by two or more persons may be vested in the following forms:

1. Community Property: A form of vesting title to property owned together by married persons. Community
property is distinguished from separate property, which is property acquired before marriage, by separate
gift or bequest, after legal separation, or which is agreed in writing to be owned by one spouse.

In California, real property conveyed to a married person is presumed to be community property unless
otherwise stated (i.e. property acquired as separate property by gift, bequest or agreement). Since all such
property is owned equally, both parties must sign all agreements and documents transferring the property
or using it as security for a loan. Each owner has the right to dispose of his/her one half of the community
property, by will. For example: Bruce Buyer and Barbara Buyer, husband and wife, as community property or
Sally Smith and Jane Smith, spouses, as community property.

2. Community Property with Right of Survivorship: A form of vesting title to property owned together by
spouses. This form of holding title shares many of the characteristics of community property but adds the
benefit of the right of survivorship, similar to title held in joint tenancy. There may be tax benefits for holding
title in this manner. On the death of an owner, the decedent’s interest ends and the survivor owns the
property. For example: Bruce Buyer and Barbara Buyer, husband and wife, as community property with right
of survivorship, or John Buyer and Bill Buyer, spouses, as community property with right of survivorship.
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