California law on joint ownership of real property
“Community Property and Community Property With Right of Survivorship”
A married couple or registered domestic partners may hold property as community property. (Cal. Fam. Code §760.)
Community property is similar to joint tenancy in that the shares are equal and there is also a right to possession of the entire property. (Cal. Fam. Code §751.) Unlike joint tenancy, there is no right of survivorship with community property, so the deceased spouse’s portion of the property is transferred by trust or a will, or through the rules of intestate succession if there is no will.
The primary benefit of holding a property as community property is for tax reasons. If a husband and wife own property as community property, under both federal and California law there is a step up in basis for both halves of the property upon the death of the first spouse. In other forms of holding title such as joint tenancy or tenants in common only one half or the property will get a stepped up basis.
California also permits property to be held as community with right of survivorship (Cal. Civ. Code §682.1). This form of ownership combines the benefits of community property and joint tenancy. Upon the death of one spouse, the property passes to the survivor, without administration, subject to the same procedures as property held in joint tenancy. The right of survivorship can be terminated pursuant to the same procedures by which a joint tenancy may be severed. (Cal. Civ. Code §682.1.) Additionally, this form of ownership also has the tax benefits of a step up in basis for both halves of the property upon the death of one spouse.
By Harrison K. Long. Source of some information is California law and the California Association of Realtors. This is for information only and is not the providing of legal services. If you have questions about how you should hold title to real property in California, contact an experienced real estate attorney.