How to Hold Title and Vesting?

Title and Vestings

Ways of Holding Title in Real Estate for Individuals (California)

In California, there are a number of ways to hold ownership to real property. The way chosen should be done carefully as it does have legal and financial implications. Some opt to set up a legal entity, like a Trust, a Corporation, or an LLC. Most of the individuals, particularly if they are purchasing their primary residences, will put the ownership under their own names, at least to begin with. So the Escrow Officer, to complete the opening paperwork, will ask the Buyers for their formal names, their title, and how they will vest their ownership. We will go through these steps and at the end of this article you will see a vesting chart which is a handy summarization.

So let’s take the first step and establish the various types of title for individuals:

  • Single – never married before
  • Unmarried – married before but not married now. Can be a widow/widower
  • Married – husband and wife or parties in a domestic partnership
  • Married but buying property solely without the spouse.

Is there a difference between single and unmarried? Yes. When you have never been married then there is no possibility of another person owning something with you previously as part of community property. In short, you have no baggage not of your own making.

When you are unmarried, on the other hand, there is a definite “before married” and “after married” division of time. In other words, there could be baggage. Anything before a dissolution of marriage or death of the partner would mean there could be assets and liabilities belonging to a partner which could affect you. For example, if you and your ex-spouse owned a property and a lien was filed against him personally, it would attached to everything he owned, including the property you co-owned. Even if you quitclaimed your interest in the property afterwards, it would not release your partial responsibility for that lien because the lien attached when you still co-owned it.

When you are married your spouse can join you in ownership. This applies to opposite sex or same sex marriages in California.

But if you are married and your spouse will not join you to co-own, in California, which is a community property state, unless the spousal interest is relinquished, your spouse can always come back to claim partial interest. A title company which will insure that you have full ownership cannot do so if there is a possibility of your spouse coming back and making a claim. Therefore, to remove the risk, the title company will require your spouse to sign a Quitclaim Deed to relinquish his/her interest.

The second step is deciding how to “vest” your title, or the manner in which your title will be held.. Here are the 4 types of vestings that can be considered:

  • As Joint Tenants
  • As Tenants in Common
  • As Community Property
  • As Community Property with Rights of survivorship

Joint Tenancy (with rights of survivorship)


  • Any number of people, related or unrelated to each other, can hold title together as Joint Tenants.
  • What is integral about this type of vesting is that the parties own the property as a whole unit, unified in time, possession, interest and from whom they got title from.
  • The “rights of survivorship” tag means that upon the death of one co-owner his interest automatically passes to the other co-owners without going through probate.
  • On the other hand the individual owners cannot will their share to another person.
  • This joint tenancy can be broken if one co-owner signs and records a deed from himself to himself. This deed will change the unity of time and title factors.
  • When the joint tenancy is broken the owners will own as tenants in common.
  • A word of caution: an individual should not hold title in joint tenancy with a legal entity, like a corporation. A corporation is an “artificial person” and can exist indefinitely so the “rights of survivorship” with an individual (a natural person) would not work in a natural person’s favor.

Example: John Smith, a Married Man as his sole and separate property, James Smith and Mary Smith, Husband and Wife, All as Joint Tenants

Tenancy in Common


  • Any number of people, related or unrelated to each other, can hold title as Tenants in Common.
  • Unlike Joint Tenancy, there is no unity in time of ownership, percentage interest and from whom they acquired the interest.
  • Owners can transfer their interest to others who will then hold their ownership in tenancy in common with the other owners.
  • Co-ownership with a legal entity would not be a problem.
  • A married couple can also hold ownership individually as tenants in common with each other. This means that they each can pass on their individual ownership to someone other than their spouse. Normally, that may require the spouses to each quitclaim their rights to the spouse’s interest so as to establish their own separate property.
  • Percentage interest should be designated. If not designated the Courts will default it to equal shares amongst the owners.

Example: John Smith, a Married Man as his sole and separate property as to an undivided 33.33% interest; James Jones and Mary Jones, Husband and Wife as Joint Tenants as to an undivided 33.33% interest; The Garcia Enterprises, LLC, a California Limited Liability Company, as to an undivided 33.33% interest, all as Tenants in Common

Example: James Jones, a Married Man and Mary Jones, a Married Woman, who are married to each other, each as to their own undivided 50% interest as their sole and separate property, as Tenants in Common

Community Property


  • This type of ownership can only be held between parties who are married to each other.
  • They hold equal interests in the property and to transfer ownership, both partners have to sign the deed.
  • Each partner may make arrangements to leave their interest in a will to others and when that happens, the successor in interest will then own the property together with the original surviving partner as tenants in common.
  • If no arrangements are made to leave their interest to someone else, the surviving spouse will own the deceased spouse’s interest separately from the interest that he/she originally owed (ownership in severalty).

Example: John Doe and Jane Doe, Husband and Wife as Community Property

Community Property with Rights of Survivorship


  • This type of ownership can only be held between parties who are married to each other.
  • The vesting is a combination of the best parts of Joint Tenancy and Community Property.
  • One spouse may break the vesting by signing a deed from himself to himself, at which time the property will then be vested as Tenants in Common with the other spouse.
  • The interest of the deceased spouse goes automatically to the surviving spouse without need for probate. But that interest so acquired will be owned separately from the interest that surviving spouse previously owned (ownership in severalty).
  • Advantage of a step-up basis of accounting to establish the baseline for the value of deceased spouse’s interest. This helps in determining the capital gain to be declared in the event the property is sold.

Example: John Doe and Jane Doe, Husband and wife as Community Property with Rights of Survivorship

Domestic Partnerships and Same Sex Marriages (California)


  • Domestic partnerships can be made up of either same sex partners or opposite sex partners one of who is over 62 years of age. Certain guidelines apply.
  • Domestic partnerships are granted the same type of rights, responsibilities and benefits as heterosexual partnerships in a marriage including the same rights to vest ownership.
  • Couples who have entered into a domestic partnerships (but are not married to each other) can be registered with the Secretary of State.
  • Same sex partners can be married to each other in this state and will have the same rights, responsibilities and benefits as heterosexual partners who are married to each other.

Example: “James Doe and Jane Doe, Registered Domestic Partners, as Joint Tenants

Example: James Smith and John Smith, who are married to each other, as Joint Tenants”.

Disclosure: It is strongly recommended that our readers consult with their financial and legal counsel as to which type of vesting best fits their needs.Viva Escrow is not authorized to give financial or legal counsel. This article is provided for informational purposes only.

As the paragraphs above could be difficult to navigate, there is a chart that has been provided through our industry these many years. Here is a copy, which you can download and print.

Click Here to View and Download the Chart

It is important to understand that for the protection of your own family, heirs and beneficiaries, considerable thought should be given as to how you should take title and vesting. Do not assume that just because it is the “common” way, that it is correct. Times change, laws change, your financial situation changes. Do not assume that just because your vesting previously was done one way, that it should remain the same through the years.

Any questions? Even though we are more than willing to help, please contact your CPA, financial planner or legal counsel as they would have more knowledge of your status and needs.

Juliana Tu
Escrow Manager

juliana tu

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