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Estate planning requires distinguishing how property is titled

When engaging in estate planning for a California resident, it is important to consider how real estate is currently titled and to change the ownership form if necessary to meet the planning goals of the owner(s).  When title is owned by two or more owners designated as having the right of survivorship, this is jointly-owned property that passes automatically by operation of law to the other owner(s) at death. Real property that is titled in the names of husband and wife is endowed with the right of survivorship, and title passes automatically to the survivor upon the other's death. Estate planning is easy when the property passes by operation of law.

However, it becomes more challenging where the real estate is jointly owned by two or more persons designated as tenants in common. In the tenancy in common, when one of the separate owners dies, the property does not pass to the other owner(s). Instead, if there are three owners and one dies, that person's one-third ownership interest passes to his or her estate and goes to his/her heirs.

Estate planning, through the making of a will, may change the last scenario, by the tenant in common devising his/her share to whoever the owner designates. The new one-third owner will share with the other two owners, as tenants in common. However, where property is owned as husband and wife, or is designated as being owned by joint tenants with the right of survivorship, the property will pass by immediate operation of law to the survivor upon the death of the joint owner.

In California and elsewhere, estate planning may use a will to change how the property would normally pass upon the owner's death. This is just one piece of what may be a complicated picture of assets and obligations associated with a person's estate. With many intricacies and legal fine points in play, it is important that the treatment of the assets for estate planning purposes be handled by an experienced estate planning attorney.

Source:, "Estate Planning: Death in the family can create hurdles for loved ones", Christopher Yugo, Oct. 1, 2017

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