Buying a home in California? How you hold title to the property can affect your ownership rights, inheritance, and taxes. During a purchase, escrow will ask how you want to hold title; this is called vesting, and in this video Katherine walks through six common ways California homeowners do it.
1. Sole ownership. One individual owns the property in their own name.
2. Tenancy in common. Two or more people own the property together, with interests that can be equal or unequal, such as 50/50 or 70/30. When an owner passes away, their interest does not automatically transfer to the other owners.
3. Joint tenancy. Owners hold equal interests with a right of survivorship: when one owner passes away, their interest generally transfers automatically to the surviving joint tenants.
4. Community property. Available to married couples and registered domestic partners in California. Each owns an equal interest, but community property on its own does not provide automatic survivorship.
5. Community property with right of survivorship. Combines community property ownership with a right of survivorship, generally allowing the deceased owner's interest to pass to the surviving spouse or registered domestic partner.
6. Property held in a living trust. Real estate can be titled in the name of a trustee, who manages it according to the trust's instructions. A properly structured and funded trust can help with estate planning and potentially avoid probate.
Why does vesting matter? It can affect who legally owns the home, what happens when an owner passes away, whether an ownership interest passes automatically, estate planning and inheritance, potential tax consequences, and your rights to the property. There is no single best option; the appropriate choice depends on your ownership arrangement, estate planning goals, and financial circumstances.
Did you know there were this many ways to hold title in California? If you are buying in Orange County and want to understand the vesting question before escrow asks it, reach out — Katherine is happy to help. The companion Short on wills versus living trusts covers the probate side in more detail.
Disclaimer: This video provides general educational information and is not legal or tax advice. Consult a qualified California estate planning attorney and tax professional before deciding how to hold title. Your real estate agent and title company can explain common vesting options but cannot provide personalized legal advice.