Property Ownership - Types of Title Vesting
One of the questions buyers ask us when they are about to take ownership of their new property is how should they hold title. As a real estate agent, I can identify different ways a title can be vested, however, I cannot and should not recommend any specific form of vesting a title. I highly recommend that buyers consult with their attorney before deciding which vesting is best for their particular situation.
Recently, I attended Paul Horn, JD and CPA seminar on probate. The whole class was filled with over 200 realtors. This three hour seminar was held at National University in Costa Mesa. One of the main topic was how one should hold title on their property and investment to best protect the interests of their future heirs and how to diminish paying unnecessary taxes.
Common methods of Holding Title:
1. Sole Ownership - ownership by an individual or entity capable of acquiring title. There are different way of vesting as sole ownership.
*One can hold it as a single man or woman, an unmarried man or woman or a widow or widower. For example: John Smith, a single man.
*One can also hold it as a married man or woman as his or her sole and separate property. For example: John Smith, a married man, as his sole and separate property.
*One can hold it as a domestic partner as his or her sole and separate property. For example: John Smith, a registered domestic partner, as his sole and separate property.
2. Community property - This form of vesting is used by married person or domestic partners. Since all community property are shared equally, each owner has the right to dispose of his/her half of the community property by will. For example: John Smith and Jane Smith, husband and wife, as community property.
3. Community property with right of survivorship - This form of vesting is the same as community property except that upon the death of one of the owners, the surviving partner owns all the interests in the property. For example: John Smith and Jane Smith, husband and wife, as community property with right of survivorship.
4. Joint Tenancy - Title held by two or more persons, who may or may not be married, hold equal interests of the property subject to right of survivorship and not subject to disposition by will. For example: John Smith, a single man and Jack Doe, a married man, as joint tenants.
5. Tenancy in Common - Title held by two or more individuals with interests that may or may not be equal, and may or may not have been assigned at the same time. Each party may sell, lease or will his/her share. For example: John Smith, a single man, as to an undivided 1/3 interest and Jack Doe, a married man, as to an undivided 3/4 interest.
6. LLC, Corporation or Partnership - A legal entity consisting of one or more individuals. For example: ABC Station, LLC
7. Trust - An agreement where the legal ownership is transferred by the grantor to a person called trustee, to be held and managed for the benefit of the beneficiaries. For example: John Smith, trustee of the John Smith Family Trust.
Keep in mind that different forms of vesting has different tax consequences. To avoid probate, one must have a trust. To utilized the benefit of step up basis, it is best to vest under community property or file for proposition 58 for the state of CA within 150 days after date of death. One should consult an attorney and tax advisor to determine what is the best way to hold title on their property.
The Eastvale Team Realty specializes in Probate listings. If you are in need or have questions regarding probate, give them a call at 951-707-9919 or you can email them at EastvaleTeam@gmail.com. They will discuss with you how you can benefit from the no commission program that they offer when they list probate properties. They are also able to close your probate transactions within 85 days guaranteed.
Property Ownership - Types of Title Vesting
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