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Holding Title

Holding Title

Did You Know How You Hold Title May Have Serious Tax Consequences? Discover New Ways of Holding Title.

Changing the way you hold title may lower your tax and legal liability and better protect your assets when certain life-events take place. We can collaborate with our team of attorneys and accountants, along with your advisers, to provide you with an analysis of how to best hold title.

Ways of Holding Title Compared

Tenancy in Common Joint Tenancy Community Property Community Property with Right of Survivorship
Parties Two or more persons (may be spouses or domestic partners) Two or more persons (may be spouses or domestic partners) Spouses or domestic partners Spouses or domestic partners
Division Ownership can be divided into any number of interests, equal or unequal Ownership interests must be equal Ownership interests must be equal Ownership interests must be equal
Creation One or more conveyances (law presumes interests are equal if not otherwise specified) Single conveyances (creating identical interests); vesting must specify joint tenancy Presumption from marriage or domestic partnership or can be designated in deed Single conveyance and spouses or domestic partners must indicate consent which can be on deed
Possession and Control Equal Equal Equal Equal
Transferability Each co-owner may transfer or mortgage their interest separately Each co-owner may transfer his/her interest separately but tenancy in common results Both spouses or domestic partners must consent to transfer or mortgage Both spouses or domestic partners must consent to transfer or mortgage
Liens Against One Owner Unless married or domestic partners, co-owner’s interest not subject to liens of other debtor/ owner but forced sale can occur Co-owner’s interest not subject to liens of other debtor/owner but forced sale can occur if prior to co-owner’s/debtor’s death Entire property may be subject to forced sale to satisfy debt of either spouse or domestic partner Entire property subject to forced sale to satisfy debt of either spouse or domestic partner
Death of Co-owner Decedent’s interest passes to his/her devisees or heirs by will or intestacy Decedent’s interest automatically passes to surviving joint tentant (“Right of Survivorship”) Decedent’s 1/2 interest passes to surviving spouse or domestic partner unless otherwise devised by will Decedent’s 1/2 interest automatically passes to surviving spouse or domestic partner due to right of survivorship
Possible Advantages & Disadvantages Co-owners interests may be separately transferable Right of Survivorship (avoids probate); may have tax disadvantages for spouses Qualified surviorship rights; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage Right of survivorship; mutual consent required for transfer; surviving spouse or domestic partner may have tax advantage

This is provided for general information only. For specific questions or financial, tax or estate planning guidance, we suggest you contact an attorney or certified public accountant.

“Persons” includes a natural person as well as a validly formed corporation, limited partnership, limited liability company or general partnership. Trust property is vested in the trustee (usually a natural person or corporation).

For domestic partners meeting California statutory requirements, benefits are same as community property except certain tax benefits may not be available. Note: Two unrelated persons who are either (a) same sex, or (b) opposite sex if they meet age or disability requirements, may be domestic partners provided that they are not then married or in a domestic partnership and comply with other statutory requirements.

Transfers by married persons or domestic partners may require a quitclaim deed from spouse/partner for title insurance purposes.

If co-owners are married or domestic partners, property may be subject to legal presumption of “community property” requiring consent of both spouses/partners to convey or encumber title notwithstanding vesting as “joint tenancy.”

Protect Yourself from Taxes

Hold title properly and avoid unnecessary exposure to risk and tax liabilities.

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