There are many different issues that can arise with respect to how you take title to property.
If joint ownership is involved, you should clearly understand the differences between taking title as joint tenants, as tenants in common, as a partnership or as community property. You should also clearly understand your rights versus the rights of your co-owners.
Each type of ownership vesting has significant ownership implications and rights of survivorship. The way a party holds title has significant Tax issues upon the death of a jointly owned property.
There is no general rule of thumb with respect to how to take title on your property. Progressive Escrow urges clients to take the time to seek professional advice, including your lawyer and CPA, to assist you in making a smart decision.
Below is a basic breakdown of different ways to hold title:
CONCURRENT – CO-OWNERSHIP INTERESTS
| COMMUNITY PROPERTY | JOINT TENANCY | Community Property with Right of Survivorship | TENANCY IN COMMON | TENANCY IN PARTNERSHIP | |
|
Parties |
Only husband and wife, domestic partners or same sex marriage
|
Two or more persons (may be spouses or domestic partners) | Husband and wife domestic partners, or same sex marriage | Two or more persons (may be spouses or domestic partners) | Only partners (any number) |
|
Division |
Ownership and managerial interest are equal except control of business is solely with managing spouse/partner | Ownership interest must be equal | Ownership interest is equal | Ownership can be divided into any number of interest equal or unequal | Ownership interest is in relation to interest in partnership |
|
Title |
Title is in the “community”. Each interest is separate but management is unified | There is only one title to the whole property | Title is in the “community”. Each interest is separate | Each co-owner has a separate legal title to his undivided interest | Title is in the “partnership” |
|
Possession |
Both co-owners have equal management and control | Equal right of possession | Both co-owners have equal possession | Equal right of possession | Equal right of possession but only for partnership purposes |
|
Conveyance |
Personal property (except “necessaries”) may be conveyed for valuable consideration without consent of other spouse/partner; real property requires written consent of other spouse/partner, and separate interest cannot be conveyed except upon death. | Conveyance by one co-owner without the others break his joint tenancy | Real property requires written consent of other spouse/partner, and with separate interest cannot be conveyed except upon death | Each co-owner’s interest may be conveyed separately by its owner. | Any authorized partner may convey whole partnership property. No partner may sell his interest in the partnership without consent of his copartners |
|
Purchaser’s Status |
Purchaser can only acquire whole title of community; cannot acquire a part of it | Purchaser will become a tenant in common with the other co-owners in the property | Purchaser will become a tenant in common with the other co-owner in the property | Purchaser can only acquire the whole title | |
|
Death |
On co-owner’s death, 1/2 belongs to survivor in severalty 1/2 goes by will to decedent’s devisees or by succession to survivor | On co-owner’s death, his interest ends and cannot be deposed of by will. Survivor owns the property by survivorship | On co-owners death the entire tenancy remains to the survivor. This right of survivorship is one of the primary incident of community property with right of survivorship | On co-owner’s death his interest passes by will to his devisees or his heir. No survivorship right | On partner’s death, his partnership interest passes to the surviving partner pending liquidation of the partnership. Share of deceased partner then goes to his estate |
|
Successor’s Status |
If passing by will, tenancy in common between devisee and survivor results | Last survivor owns property in severalty | If passing by Will, tenancy in common between devisee and survivor results | Devisee or heirs become tenants in common | Heirs or devises have rights in partnership interest but not in the specific property. |
|
Creditor’s Rights |
Property of community is liable for contracts of either spouse/partner which are made after marriage and prior to or after marriage and prior to or after January 1, 1975. Co-owner’s interest can’t be sold separately: whole property may be sold on execution to satisfy creditor | Co-owner’s interest may be sold on execution sale to satisfy creditor. Joint tenancy is broken, creditor becomes tenant in common | Property of community is liable for contracts of either spouse/partner which are made after marriage and prior to or after January 1, 1975. Co-owner’s interest can note be sold separately; whole property may be sold on execution to satisfy creditor | Co-owner’s interest may be sold on execution sale to satisfy his creditor. Creditor becomes tenant in common | Partner’s interest cannot be seized or sold separately by his personal creditor but his share of profits may be obtained by a personal creditor. Whole property may be sold on execution sale to satisfy partnership creditor |
|
Presumption |
Strong presumption that property acquired by husband and wife/domestic partners is community property | Must be expressly stated. Not favored | Favored in doubtful cases except husband and wife/domestic partners case | Arise only be virtue of partnership statue in property placed in partnership |
