Determining How To Take Title at Your Signing Isn't Easy

If you are buying a new home in the San Mateo area, determining how to take title of your property is a major decision for you when it comes time to sign your loan documents at an Escrow company. ˜How do you want to hold title?” is the question you will be asked and the person asking it, the Escrow Officer, can not help you with the answer. It’s a simple question with multiple answers and most people don’t know what to say, or what each means. If you pick wrong it could have terrible consequences should something happen to you. Luckily, what you pick can be changed, and pretty easily. Wouldn’t it be better to go the the settlement table with an idea of what you want to do in advance? Sure it would.

There are six ways one can have an ownership stake. California is a community property state, where a married couple owns everything equally unless it is something brought into the marriage as separate property, an inheritance, or they have a pre-neptual agreement stipulating other arrangements.

Understanding how to hold title to your real estate is very important. Take a few minutes to read throught this chart now and you will be prepared when you sign all of your documents at the closing of your new home. If you are confused about what is best for you, talk to your lawyer or accountant. Not only can’t your Escrow Officer suggest anything, your Realtor really isn’t supposed to do it either.

The three most common choices for holding title for individuals or couples are Community Property, Joint Tenancy, and Community Property Right of Survivorship. Tenancy in Common is used most with TICs. Title Hold Trust is used when you have had a trust written for you. Tenancy in Partnership is generally used in business situation only.

	Community Property	Joint Tenancy	Tenancy in Common	Tenancy in Partnership	Title Holding Trust	Community Property Right of Survivorship
Parties	Only husband & wife	Any number of persons-can be husband & wife	Two or more persons or entities	Only partners (any number)	Individuals or groups-partnerships or corporations	Only husband & wife
Division	Ownership & managerial interests are equal	Joint tenants have one of the same interest	Ownership can be divided into equal or unequal interests	Ownership interest is in relation to the partnership	Ownership is personal property interest-can be divided into # of interests	Ownership and managerial interests are equal
Title	Title is in the community-each interest is equal	Only one title to the entire property	Each co-owner has a separate legal title to his or her undivided interest	Title is in the partnership	Legal and equitable title is held by the trustee	Title is in the community Each interest is separate
Possession	Both co-owners have equal possession	Equal right of possession	Each co-owner has a separate legal title to his or her undivided interest	Equal right of possession but only for partnership property	Right of possession as specified in the trust provision	Both co-owners have equal possession
Conveyance	Real property requires written consent of the other spouse & with separate interest cannot be conveyed except upon death	Conveyance by one co-owner without the other breaks his or her joint tenancy	Each co-owners interest may be conveyed separately by its owner	Any authorized partner may convey whole partnership property fro partnership purposes	Designated parties within the trust agreement authorize the trustee to convey property. A beneficiarys interest in the trust may be transferred.	Real property requires written consent of other spouse, an with separate interest cannot be conveyed except upon death
Purchasers Status	Purchaser can only acquire title of community; cannot acquire a part of it	Purchaser will become a tenant in common with other co-owners in the property	Purchaser will become a tenant in common with the other co-owners in the property	Purchaser can only acquire the whole title	Purchaser may obtain a beneficial interest by assignment or may obtain legal and equitable title from the trust	Purchaser can only acquire whole title of community; cannot acquire a part of it
Death	On co-owners death, 1/2 belongs to survivor in severalty. 1/2 goes by will to descendants devisee or by succession to survivor	On co-owners death the entire tenancy remains to the survivor. This right of survivorship is the primary incident of joint tenancy	On co-owners death his or her interest passes by will to devisee or heirs. No survivorship right	On partners death his or her partnership interest passes to the surviving partner(s) pending liquidation of the partnership. Share of deceased partner then goes to his or her estate	Successor beneficiaries may be named in the trust agreement, eliminating the need for probate	On co-owners death the entire tenancy remains to the survivor. Subject to the same procedures as property held in joint tenancy
Successors Status	Devisees or heirs become tenants in common	Last survivor owns property in severalty	Devisee or heirs become tenants in common	Heirs or divsees have rights in partnership interest but not in specific property	Defined by trust agreement, generally the successor becomes the beneficiary and trust continues	Surviving spouse owns property
Creditors Rights	Co-owners interest may be sold on execution sale to his or her creditor. Creditor becomes tenant in common	Co-owners interest may be sold on execution sale to satisfy creditor. Joint tenancy is broken and creditor becomes tenant in common	Co-owners interest may be sold on execution sale tohis or her creditor. Creditor becomes a tenant in common	Partners interest may not be seized or sold separately by his or her personal creditor but his or her share of profits may be obtained by a personal creditor. Whole property may be sold on execution sale to satisfy partnership creditor	Creditor may seek an order for execution sale of the beneficial interest or may seek an order that the trust estate be liquidated and the proceeds distributed	Property of community is liable for debts of either which are made before or after marriage; whole property may be sold on execution sale to satisfy creditor
Presumption	Strong presumption that property acquired by husband and wife is community	Must be expressly stated	Favored in doubtful cases except husband and wife cased interest	Arise only by virtue of partnership status in property placed in partnership	A trust is expressly created by an executed trust agreement	Must be expressly stated

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