Vesting Descriptions
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 or woman, an unmarried man or woman
or a widow or widower:A man or woman who is not legally married or in a domestic partnership.
For example: Bruce Buyer, a single man.
2. A Married Man or Woman as His or 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 a married couple want title
to the property to be granted to one spouse as that spouse’s sole and separate
property. The same rules will apply for same sex married couples.
For example: Bruce Buyer, a married man, as his sole and separate property.
3. A Domestic Partner as His or Her Sole and Separate Property:
A domestic partner who wishes to acquire title in his or her name alone. The title
company insuring title will require the domestic partner of the person acquiring
title to specifically disclaim or relinquish his or her right, title and interest to the
property. This establishes that both domestic partners want title to the property
to be granted to one partner as that person’s sole and separate property.
For example: Bruce Buyer, a registered domestic partner, 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 together by married persons or by
domestic partners. Community property is distinguished from separate property,
which is property acquired before marriage or before a domestic partnership by
separate gift or bequest, after legal separation, or which is agreed in writing to be
owned by one spouse or domestic partner.
In California, real property conveyed to a married person, or to a domestic partner
is presumed to be community property, unless otherwise stated (i.e. property
acquired as separate property by gift, bequest or agreement). Since all such
property is owned equally, both parties must sign all agreements and documents
transferring the property or using it as security for a loan. Each owner has the right
to dispose of his/her one half of the community property by will.
For example: Bruce Buyer and Barbara Buyer, husband and wife, as community
property, or Sally Smith and Jane Smith, registered domestic partners as community
property. Another example for same sex couples: Sally Smith and Jane Smith,
spouses, as community property.
Co-Ownership Continued
2. Community Property with Right of Survivorship:
A form of vesting title to property owned together by a married couple or by
domestic partners. 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. On the death of an owner, the decedent’s interest ends and the survivor
owns all interests in the property.
For example: Bruce Buyer and Barbara Buyer, husband and wife, as community
property with right of survivorship, or John Buyer and Bill Buyer, a married couple,
as community property with right of survivorship. Another example for same sex
couples: Sally Smith and Jane Smith, registered domestic partners, 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 or domestic partners, in equal interests, 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: Bruce Buyer, a married man and George Buyer, a single man, as joint
tenants.
Note: If a married person enters into a joint tenancy that does not include their
spouse, the title company insuring title may require the spouse of the married man
or woman acquiring title to specifically consent to the joint tenancy. The same rules
will apply for same sex married couples and domestic partners.
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: Bruce Buyer, a single man, as to an undivided 3/4 interest and
Penny Purchaser, a single woman, as to an undivided 1/4 interest.
Other ways of vesting title include:
1. Trustees of a Trust:
A Trust is an arrangement whereby legal title to property is transferred by a 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. A trust
is generally not an entity that can hold title in its own name. Instead title is often
vested in the trustee of the trust. For example: Bruce Buyer trustee of the Buyer
Family Trust.