What is Title?
Before we delve into how to hold title in California, it is crucial to understand the meaning of title: it describes a person’s ownership and usage rights to a piece of property. The term title is most often used in relation to real property, but it can also refer to the manner in which personal property (e.g., vehicles, artwork, bank accounts) is held.
With regard to real property, for a person to hold title, they generally must be the recipient of a physical document known as a deed, which states that the subject real property is being conveyed to them. The type of deed they sign will depend on the manner in which they wish to hold title to the property. We go over the various ways to have a title in California below.
Types of Deeds in California
When the ownership of real property is being transferred from one person or entity to another, a deed is generally recorded with the County Recorder to memorialize the transfer of ownership.
It is important to note that deeds can be used to convey different types of ownership. For example, deeds can convey complete and total ownership of a property, which is known as “fee simple” ownership. Deeds can also be used to convey something less than full ownership rights, like a “life estate,” which grants the recipient certain temporary rights of ownership for the duration of their lifetime. In this article, we will focus on fee simple ownership.
As noted above, a deed is a document that conveys ownership. It can be used either to transfer ownership rights from a current owner to a new owner or to add another owner to the title for the property. There are different types of deeds available in California to serve a variety of needs; the type of property deed that is ultimately used will depend upon the nature of the transfer being carried out.
Some of the more common types of deeds you may have heard of include the following:
Grant deed: A grant deed is used to transfer ownership from the current owner to a new owner, or to add a new owner to a title (e.g., trustees use grant deeds to transfer property belonging to the trust to its intended beneficiaries). Grant deeds warrant that the grantor (the person or entity transferring the property) has a legal interest in the property and that there are no claimants to the title, as well as no other restrictions or liens on the property.
Quitclaim deed: A quitclaim deed is used to transfer ownership from the current owner to a new owner, to add a new owner to the title, or to disclaim or waive ownership rights in favor of another party (e.g., a divorced spouse signs a quitclaim deed to cede ownership rights to the family home as part of a divorce settlement). Unlike a grant deed, a quitclaim deed makes no warranties regarding the grantor’s legal interest in the property.
Interspousal deed: An interspousal deed is a type of grant deed used to confirm sole ownership of a property to one spouse or domestic partner. It can also be used to change the character of real property to or from community property in marriages or domestic partnerships (e.g., a newly married spouse uses an interspousal deed to change the character of their separate real property into community property). Interspousal deeds are often used in divorce proceedings to confer sole ownership of a community property asset to one spouse.
Trust Transfer Deed: A trust transfer deed is typically a grant deed that is used to convey property from an individual into the individual’s trust. Trust transfer deeds are often utilized by settlers after a trust is created to fund their real property into the trust.
Transfer on Death Deed (TOD): In California, a transfer on death deed is a revocable deed used to leave a real property asset to designated beneficiaries without the property being subject to probate. Unlike a traditional deed, TOD deeds do not convey a present interest in the property to the recipient; rather, the TOD deed only takes effect upon the death of the settlor and can be revoked by the settlor at any time during their lifetime.
Source: https://keystone-law.com/ways-to-hold-title-in-california (5 Ways to Hold Title in California, Aug 27, 2022)
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