The method of titling the ownership of property in California and elsewhere is generally an integral aspect of proper estate planning. By configuring the title to assets in designated ways during the life of the owner(s), estate planning can assure certain outcomes automatically on the death of an owner. The simplest form of ownership is where one individual owns the property in his/her name alone. If the asset is real estate, the single ownership model is called "fee simple" ownership, which represents the highest degree of unfettered ownership in real property.
Assets owned as joint tenants with the right of survivorship represent ownership by the joint owners. For inheritance purposes, a deceased owner's share is automatically passed to the surviving joint tenant by operation of law. Assets titled this way do not pass through the decedent's estate but are automatically owned by the survivor. Assets owned individually in fee simple will pass to the decedent's heirs and must go through the decedent's estate at death.
Ownership by tenants in common represents separate shares owned by each of the tenants. Thus, if there are three tenants in common owners of a parcel of real estate, the death of one tenant will pass that tenant's ownership interest onto that owner's heirs. The share of a deceased tenant in common will have to be reported by decedent's estate and treated as an estate asset.
When an individual or married couple meet with an estate planning attorney to set up an estate plan, the attorney will explain and discuss the impact of the various ways of titling assets. Title to certain assets may be changed to conform to the owners' wishes for the most expedient way of transferring title at death. In some cases, title to an asset or assets will go into a living trust, which generally is a way of passing assets at death without going through the decedent's estate. In California and elsewhere, the issues to evaluate are usually too complex to justify do-it-yourself estate planning, and the matter should therefore be jointly undertaken in cooperation with an experienced estate planning attorney.
Source: paulsvalleydailydemocrat.com, "How to title your property", Dan Barney, Oct. 25, 2017