Vesting Ways to Hold Title
How To Hold Title? You should inform your escrow officer and lender as soon as possible of how you wish to hold title to your home and exactly how your name(s) will appear on all documents. This allows your lender and title company to prepare all documents correctly. (Changes later, such as adding or deleting an initial in your name, can delay your closing.) You may wish to consult an attorney, accountant or other professional before deciding how to hold title.
|TENANCY IN COMMON||JOINT TENANCY||COMMUNITY PROPERTY||COMMUNITY PROPERTY
with Right of Survivorship
|Parties||Two or more persons 1||Two or more natural persons||Spouses or domestic partners 2||Spouses or domestic partners 2|
|Division||Ownership can be divided into any number of interests, equal or unequal||Ownership interests must be equal||Ownership interests must be equal||Ownership interests must be equal|
|Creation||One or more conveyances (law presumes interests are equal if not otherwise specified)||Single conveyances (creating identical interests); vesting must specify joint tenancy||Presumption from marriage or domestic partnership or can be designated in deed||Single conveyance and spouses or domestic partners must indicate consent which can be on deed|
|Possession and Control||Equal||Equal||Equal||Equal|
|Transferability||Each co-owner may transfer or mortgage their interest separately||Each co-owner may transfer his/her interest separately but tenancy in common results||Both spouses or domestic partners must consent to transfer or mortgage||Both spouses or domestic partners must consent to transfer or mortgage|
|Liens Against One Owner||Unless married or domestic partners, co-owner’s interest not subject to liens of other debtor/owner but forced sale can occur||Co-owner’s interest not subject to liens of other debtor/owner but forced sale can occur if prior to co-owner’s/debtor’s death||Entire property may be subject to forced sale to satisfy debt of either spouse or domestic partner||Entire property subject to forced sale to satisfy debt of either spouse or domestic partner|
|Death of Co-Owner||Decedent’s interest passes to his/her devisees or heirs by will or intestacy||Decedent’s interest automatically passes to surviving joint tenant (“Right of Survivorship”)||Decedent’s 1/2 interest passes to surviving spouse or domestic partner unless otherwise devised by will||Decedent’s 1/2 interest automatically passes to surviving spouse or domestic partner due to right of survivorship|
|Possible Advantages/ Disadvantages||Co-owners interests may be separately transferable 3||Right of Survivorship (avoids probate); may have tax disadvantages for spouses||Qualified survivorship rights; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage 2||Right of survivorship; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage|
1. “Persons” includes a natural person as well as validly formed cooperation, limited partnership, limited liability company or general partnership. Trust property is vested in the trustee (usually a natural person or corporation).
2. Transfers by spouses/domestic partners may require a quitclaim deed from the other spouse/partner for title insurance purposes.
3. If co-owners are spouses/domestic partners, property may be subject to legal presumption of “community property” requiring consent of both spouses/partners to convey or encumber title notwithstanding vesting as “joint tenancy”
THIS IS PROVIDED FOR GENERAL INFORMATION ONLY. FOR SPECIFIC QUESTIONS OR FINANCIAL, TAX OR ESTATE PLANNING GUIDANCE, WE SUGGEST YOU CONTACT AN ATTORNEY OR CERTIFIED PUBLIC ACCOUNTANT.