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How should I take ownership of the home I am buying?
Buyers Answers
The form of ownership taken - the vesting of title - will determine who may sign various documents involving the property and furture rights of the parties to the transaction. These rights involve such matters as: real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor''s claims. Also, how title is vested can have significant probate implications in the event of death.
The California Land Title Association (CLTA) advises those purchasing real property to give careful consideration to the manner in which title will be held. Buyers may wish to consult legal counsel to determine the most advantageous form of ownership for their particular situation, especially in cases of multiple owners of a single property.
The CLTA has provided the following definitions of common vestings as an informational overview. Consumers should not rely on these as legal definitions.
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:
A Single Man/Woman: A man or woman who has not been legally married.
An Unmarried Man/Woman: A man or woman who was previously married and is now legally divorced.
A Married Man/Woman as His/Her Sole and Separate Property: A married man or woman who wishes to acquire title in his or her name alone.
CO-OWNERSHIP - Title to property owned by two or more persons may be vested in the following forms:
Community Property: A form of vesting title to property owned by husband and wife during their marriage which they intend to own together. Community property is distinguished from separate property, which is property acquired before marriage, by separate gift or bequest, after legal separation, or which is agreed in writing to be owned by one spouse.
Community Property with Right of Survivorship: A form of vesting title to real property owned by husband and wife during their marriage which they intend to own together. 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.
Joint Tenancy: A form of vesting title to property owned by two or more persons, who may or may not be married, in equal interest, 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).
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.
REMEMBER: How title is vested has important legal consequences. You may wish to consult an attorney to determine the most advantageous form of ownership for your particular situation.
Reprinted with permission from the California Land Title Association.
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