Common Ways to Hold Title

Please consult with your attorney and accountant:

Common Methods of Holding 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 has not been legally married. For example: John Buyer, a single man.
2. An Unmarried Man/Woman: A man or woman who was previously married and is now legally divorced. For example: Jill Seller, an unmarried woman.
3. 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 it is the desire of
   both spouses that title to the property be granted to one spouse as that spouse’s
   sole and separate property. For example: John 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 by husband
   and wife during their marriage which they intend to own together. 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 man or woman is presumed to be
   community property, unless otherwise stated. Since all such property is owned equally,
   husband and wife must sign all agreements and documents transferring the property or
   using it as security for a loan. Under community property, each spouse has the right to
   dispose of one half of the community property, by will. For example: John Buyer and Jill Buyer,
   husband and wife as community property.
2. Community Property with Right of Survivorship:
   A form of vesting title to real property owned by husband and wife during their
   marriage which they intend to own together. 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. Interest must be created on or after July 1, 2001. On the death of a spouse,
   the decedent’s interest ends and the surviving spouse owns the property by survivorship and
   owns the property in severalty. For example: John Buyer and Jill Buyer, husband and
   wife as community property with right of survivorship.
3. Joint Tenancy: A form of vesting title to property owned by two or more persons,
   who may or may not be married, in equal interest, subject to the right of survivorship in
   the surviving joint tenant(s). Title must have been acquired at the same time, by the
   same conveyance, and the document must expressly declare the intention to create a joint
   tenancy estate. When a joint tenant dies, title to the property is automatically conveyed
   by operation of law to the surviving joint tenant(s). Therefore, joint tenancy property is
   not subject to disposition by will. For example: John Buyer and Jill Buyer, husband
   and wife as joint tenants.
4. Tenancy in Common:
   A form of vesting title to property owned by any two or more individuals in undivided
   fractional interests. These fractional interests may be unequal in quantity or duration
   and may arise at different times. Each tenant in common owns a share of the property, is
   entitled to a comparable portion of the income from the property and must bear an equivalent
   share of expenses. Each co-tenant may sell, lease or will to his/her heir that share of
   the property belonging to him/her. For example: John Buyer, a single man, as to an
   undivided 3/4 interest and Jill Buyer, a single woman, as to an undivided 1/4 interest,
   as tenants in common.

Other ways of vesting title include…

1. A Corporation*: A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having an existence and personality separate from such shareholders.
2. A Partnership*: A partnership is an association of two or more persons who can carry on business for profit as co-owners, as governed by the Uniform Partnership Act. A partnership may hold title to real property in the name of the partnership.
3. Trustees of A Trust*: A Trust is an arrangement whereby legal title to property is transferred by the grantor to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called the beneficiaries.
4. Limited Liability Companies (L.L.C.): This form of ownership is a legal entity and is similar to both the corporation and the partnership. The operating agreement will determine how the L.L.C. functions and is taxed. Like the corporation its existence is separate from its owners.