Because real property is among the most valuable of assets, the question of how you take ownership of your property is of great importance. The form of ownership taken – the vesting of title – provides guidelines for how a property should be passed, should one or all of the property owners become deceased.
Tenancy In Common
A tenancy in common is created whenever an instrument conveys an interest in real property to two or more persons and specifies tenancy in common. If a recorded conveyance document does not expressly specify the tenancy (joint tenancy, community property, etc.), the legal presumption is that the vesting is tenancy in common. The interest in the property owned may be any fraction of the whole; thus one party may own one-tenth, another three-tenths, and a third party may own the remaining three-fifths. There is no right of survivorship; each tenant owns an interest that vests in his or her heirs or devisees upon death.
The main characteristic of joint tenancy is the right of survivorship. When a joint tenant dies, his or her interest in the property is terminated, and the estate continues in the survivor or survivors.
Upon the death of one joint tenant, the title automatically passes to the survivor. Title insurance companies will require some formal procedure before recognizing the new owner. Two methods are followed: Filing an Affidavit of Death of Joint Tenant or obtaining a court decree of death of joint tenant.
In general, community property represents the earnings and accumulations of the marriage. Persons who are not married to each other, or are not registered domestic partners, cannot hold community property together. All property of married persons or registered domestic partners that is not their community property is the separate property of one or the other. All deeds conveying community property must be signed by both spouses or registered domestic partners
Separate property consists of:
- Property owned before marriage or registered domestic partnership
- Proceeds of separate property, such as dividends, rents, profits or property received in exchange for separate property
- Gifts and inheritances received after marriage or registered domestic partnership
- Property agreed between the spouses or registered domestic partners to be separate property
- Earnings of one spouse or registered domestic partner when he or she is living separate and apart from the other spouse or registered domestic partner
Community Property with Right of Survivorship
This is a form of vesting title to property owned together by spouses or by registered domestic partners. It shares many of the characteristics of community property but adds the benefit of the right of survivorship, similar to title held in joint tenancy. Upon the death of an owner, the decedent’s interest ends and the survivor owns the property.
This article is part of the Home Buyer Guide.