Ways to Hold Title in Sacramento When Buying a Home

Sacramento home buyers should discuss ways to hold title before opening escrow.

Home buyers often give little thought to the ways to hold title. I hear escrow officers ask the question over and over, and watch buyers’ puzzled faces as they grope for answers. How to hold title is something buyers should decide upon about the same time as they receive a lender preapproval letter, but unless their agent brings it up, they might not give it a second thought.

Be aware that Sacramento Realtors are not licensed to practice law, so we can’t advise buyers, unfortunately. It’s a legal question that is best answered by a real estate lawyer. But let’s get real, how many buyers are going to run to their lawyers and pay for this type of advice, even though it’s suggested? Not one.

Here are some of the ways to hold title in California:

• Joint Tenants with Right of Survivorship
• A Married Person, Sole and Separate
• Community Property
• Community Property with Right of Survivorship
• Trust
• Corporation or Partnership
• LLC (limited liability corporation)

Apart from possible tax ramifications, the way a buyer holds title affects transfer, rights of transfer and whether the remaining interest will pass along to the survivor in the event of death. It’s an important consideration and should not be decided upon simply because one form sounds more familiar or because that’s how your parents hold title.

Please do your own research and get legal advice before deciding. Just don’t pick joint tenancy because all your friends pick that option. Community Property with Right of Survivorship is probably the most common that I see buyers leaning toward. It gives you the benefits of survivorship in the event one person dies, the property transfers to the remaining spouse but you can’t sell your interest.