Answer 5 questions to identify topics to review with your attorney, CPA, and title professional.
Built by California title professionals · Educational purposes only · Always consult a licensed attorney and CPA
Click any card to expand the full details — implications, warnings, and agent tips.
Created by the California Legislature in 2001 to combine the best features of joint tenancy and community property. Property passes automatically to the surviving spouse at death — no probate — AND both halves receive a full step-up in basis.
California is one of only 9 community property states. Each spouse owns exactly half. Either spouse can will their half to any beneficiary. But without a trust or CPWROS designation, the first death triggers probate.
Each owner holds an equal, undivided interest. When one owner dies, their share passes automatically to the surviving owners — bypassing probate. But this comes with a significant tax cost for married couples compared to community property.
Each owner holds a specified fractional interest — not necessarily equal. One could own 50%, another 30%, another 20%. Commonly used by investors, business partners, and family co-buyers.
One person holds an undivided interest. Can be a single person, an unmarried person, a widow or widower, or a married person holding as sole and separate property. Without a trust, the property goes through probate at death.
Title is vested in the trustee's name — e.g., "Jane Smith, Trustee of the Smith Family Trust dated January 1, 2020." The trustee manages the property for the trust's beneficiaries without court involvement.
The LLC is the owner of record — not individual members. Commonly used by investors for liability protection, privacy, and multi-party flexibility. Comes with serious complications for residential buyers.
All vesting types at a glance — use this as a quick reference during client conversations.
| Vesting Type | Who Can Use | Survivorship | Probate Risk | Step-Up in Basis | Can Will Share | Best For |
|---|---|---|---|---|---|---|
| CPWROS ⭐ | Spouses / RDPs | ✓ Automatic | ✓ None | ✓ Full 100% | ✗ Survivorship controls | Married couples wanting max tax benefit + no probate |
| Community Property | Spouses / RDPs | ✗ None auto | ✗ Yes (w/o trust) | ✓ Full 100% | ✓ Yes | Couples who want to direct inheritance; pair with a trust |
| Joint Tenancy | Any owners | ✓ Automatic | ✓ None | ⚠ 50% only | ✗ Survivorship overrides will | Non-married co-owners wanting automatic survivorship |
| Tenancy in Common | Any owners | ✗ None | ✗ Yes (w/o trust) | ✓ Deceased's share | ✓ Yes | Investors / partners needing unequal shares |
| Sole Ownership | Single owner | ✗ N/A | ✗ Yes (w/o trust) | ✓ Full at death | ✓ Yes | Single buyers; married buying separate (quitclaim required) |
| Living Trust | Any owners | ✓ Per trust terms | ✓ None | ✓ Per underlying title | ✓ Full control | Most buyers — best comprehensive solution; verify property is in trust |
| LLC | Investors | Per agreement | Varies | Varies | Per agreement | Investment / rental; consult attorney first |
These are the situations title companies see every day. Click to see what happened — and what should have been done differently.
A married couple buys a home in 1998 for $300,000. They choose joint tenancy because it sounds simple. The husband dies in 2024 when the home is worth $1.8 million.
Because they held as joint tenants, only his half — $900,000 — gets stepped up in basis. The wife's original basis of $150,000 stays. When she sells, she owes capital gains tax on her original half's appreciation going back to 1998.
Sellers mention at the listing presentation that they have a living trust and "everything is set up." The agent moves forward confidently. Two weeks before closing, title discovers the property is still in the sellers' personal names — the trust was created but never funded.
The closing is delayed while a new deed is prepared, signed, notarized, and recorded. An attorney has to get involved. The buyers' rate lock is at risk.
Three investors buy a rental property as tenants in common. Two want to sell three years later. The third refuses. That third owner files a partition action.
The court orders the property sold — at a time, price, and manner that none of the original partners would have chosen. Legal fees eat significantly into the returns.
A longtime homeowner with a Prop 13 base year value of $180,000 asks his agent to help him add his adult daughter to the title "just to make things easier." No one flags the Prop 19 implications. The transfer triggers a full reassessment to current market value of $1.4 million.
Property taxes jump from under $2,000/year to nearly $15,000/year. The daughter can't afford to keep it.
An investor shows up wanting to close in the name of his newly formed LLC. The lender won't fund to an LLC. The transaction nearly collapses — the buyer has to scramble to either close in his personal name or lose the deal.
No one had flagged the financing issue because no one asked the right question about how the buyer intended to take title.
You don't need to be the legal expert. You need to know enough to say: "Stop — talk to your attorney before you decide this."
⚠️ The Prop 19 Warning — Every Agent Must Know This
California Prop 19 significantly limits the ability to transfer a home to heirs without property tax reassessment. The parent-child exclusion now only applies when the property is the parent's principal residence AND the child makes it their own primary home. As of February 16, 2025, the reassessment exclusion cap is $1,044,586. Any value above that is fully reassessed. Always refer to an attorney and CPA — no exceptions.