In California and other jurisdictions, the way that real estate is titled will have an effect on how the property is passed on to others. Thus, when an individual or married couple purchase real estate, it is important how the property is titled because that designation has an estate planning effect. If the new deed lists the grantees as husband and wife, for example, this is interpreted as meaning that the parties are joint tenants with the right of survivorship.
In such a case, the estate planning application is that the property passes automatically to the surviving spouse by operation of law. There is a presumption that the foregoing outcome is intended for persons who are married and take the deed as husband and wife. Where the individuals taking title are not married, different effects can be engineered through the wording on the deed.
If the two new owners want to own the property on a 50-50 basis, they can designate that they are taking title as tenants in common. This separates ownership whereby each 50 percent interest passes to the individual's heirs and not to the surviving owner upon death. If, however, the wording is that the parties take as "joint tenants with the rights of survivorship," the survivor will take a decedent's share and become the sole owner by operation of law on the other owner's death.
It is important to know and intend the wording on the deed because that wording will reflect the distribution of the property at death of one of the owners. Where the ownership relationship is not mentioned, the law will usually presume that ownership is as tenants in common. It should be noted that when the owners are husband and wife, their listing on the deed as husband and wife is deemed to mean "tenants by the entireties," a legal term that carries certain addition protections for a married couple. In California and other states, the use of legal ownership nomenclature in estate planning is a topic that an estate planning attorney can more fully explain.