When buying a home, there is an overwhelming amount of terms and concepts that you will have to learn and truly understand. Your home is probably the biggest purchase you will make in your lifetime and the most valuable asset you will ever own.

For this reason, you will want to make sure that you are making well-informed decisions throughout the entire process. Vesting is a term that you definitely want to understand fully since you will have to make long lasting decisions and you want to make sure you are making the right one.

Please note that each state has laws regarding how individuals can hold title and vest in their property, but here we will focus on the laws of California.


What Does Vesting Mean?

There is a difference between Title and Vesting. The title refers to the actual ownership of the property, and vesting refers to how owners hold title to the property. Regardless of which form of vesting is in place, the actual ownership interest (Title) is not impacted.

Vesting can, however, change the owner’s ability to encumber, sell or will their interest in a property. In other words, it determines what an owner(s) can do with their property in their lifetime – and after. In essence, a property’s vesting can mean the difference between going through probate or not when the owner dies.

The first step is determining who is buying this property.


Most Common Forms of Holding Title

It is crucial to remember that the form of title that you choose has inheritance and/or tax implications. Your escrow officer at Citrus Heritage Escrow will be able to explain the differences between the various manners in which title can be held. We will not be able to actually recommend what would be best for a buyer. For that, the buyer should consult an attorney, CPA or estate planner who is more familiar with the buyer’s specific situation.

1. Sole Ownership

    1. As a single man or woman
    2. As a Married man or woman
    3. As a registered domestic partner, man or woman

2. Co-ownership

    1. Community property, which is the presumed form for married couples. This entitles each party to equal parts of the property.
    2. Community property with rights of survivorship, which automatically transfers the property to the survivor in the face of a death.

3. Joint Tenancy

    1. This includes equal interests with rights of survivorship, but where the partners are not necessarily married.

4. Tenancy in Common

    1. In this form, the parties’ interests are broken up, and the costs and benefits are then divided as such.


Vesting With Co-Ownership

In California, the different vesting options available for co-ownership of property are:

1. Community Property

This type of vesting is applicable when a property is owned equally by married persons. Property owned by a married person is presumed community property unless otherwise stated. (for instance, property that was acquired by a gift, inheritance, or by agreement) Each owner can dispose of their half of the property by will.

2. Community Property with Right of Survivorship

This type of vesting is also applicable when a property is owned equally by a married couple. The vesting is the same as community property described above but adds the right of survivorship. This means that when one spouse dies, their half interest transfers to the surviving spouse. Important to note that this means the property will not go through probate at the time of the spouse’s death.

3. Joint Tenancy

This type of vesting applies when a property is owned by more than one person who may or may not be married. Each owner has an equal interest in the property (depending upon the number of owners.) It also provides the right of survivorship in the surviving joint tenant(s), as long as title was acquired at the same time, by the same conveyance, and the document must expressly declare the intention to create a joint tenancy estate.

4. Tenancy in Common

This type of vesting is for property owned by two or more persons with unequal ownership (referred to as fractional interests.) Each owner may sell, lease or will their share of the property.

5. Transfer on Death

This is new in California. The law went into effect in January 2016 (Assembly Bill 139). It’s meant to be a probate-free alternative for property vested as sole owners. It allows the property to be passed directly to a designated party upon the owner’s death. It would be best to discuss the conditions and concerns about this form of vesting with a tax advisor, financial advisor, or estate planning attorney.


Frequently Asked Questions (FAQs)

1. How Can I Get a Vesting Deed?

You can request a copy of the actual vesting deed by going to the county recorder where the property is located or by contacting a title company who can email you a copy within a few days.

2. What Does “Vested Owner of Property” Mean?

Vested ownership is a type of ownership in which the owner of the item or property in question has complete and full ownership of it. In the context of the law, a person who has vested ownership of a thing has the full legal rights to it.

3. What Does “Joint Tenancy” Mean?

This type of ownership or “vesting” provides or contains “rights of survivorship” without having to go through probate. This conveys ownership of the deceased person(s) property or “estate” to the surviving owner(s) immediately upon the partner’s death. This is a very common form of vesting for married couples.

4. What Does “Tenants In Entirety” Mean?

This type of ownership or “vesting” is a type of concurrent estate in real property that occurs when the property owners are married. Each spouse has an equal and undivided interest in the property. Essentially, each spouse mutually owns the entire property.

5. What Is the Difference Between Single and Unmarried?

Unmarried refers to the marital status of the person. It means that he/she has never been married, nor has been remarried after divorce. Single, on the other hand, means that a person is legally separated, or the person has never been married.

6. How Can a Single Person Hold a Title?

  • Sole ownership. If you are single, one way to hold title to your home is in your name alone
  • Tenants in common
  • Joint tenancy with right of survivorship
  • Community property
  • Living trust

7. What Does It Mean When a Married Person Has Sole and Separate Property?

When a married person wishes to acquire title as their sole and separate property, the spouse must consent and relinquish all right, title and interest in the property by deed or other written agreement.

8. How Should a Husband and Wife Hold Title in California?

California married couples generally have three options to take title to their community (vs separate) property real estate: community property, joint tenancy or “Community Property with Right of Survivorship.”


What Happens at Citrus Heritage Escrow?

Your escrow officer follows instructions on your contract, coordinates deadlines, and gathers all necessary paperwork. For example, written requests for payoff information (called “demands”) are sent to the Seller’s mortgage company and any other lien holders.

During the escrow period, the title company coordinates with Citrus Heritage Escrow and begins researching and examining all historical records pertaining to the subject property. Barring any unusual circumstances, a commitment for title insurance is issued, indicating a clear title or listing any items which must be cleared prior to closing. The commitment is sent to you for review.

When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.

Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200