For most married couples buying a home in California, the strongest way to hold title is community property with right of survivorship. It keeps the full community property tax advantage at death, and it moves title to the surviving spouse automatically without probate. Deciding how to hold title in California as a married couple comes down to that tax treatment, whether probate is triggered when one spouse dies, and how much control each spouse retains during the marriage. The rest of this article walks through each option so you can confirm the default fits your situation.
The Vesting Options Available to Married Couples
Community Property
California presumes that anything a couple acquires during marriage is community property, no matter whose name is on the deed or whose money paid for it.1California Legislative Information. California Code, Family Code FAM 760 Each spouse owns an equal half. Neither can sell, refinance, or lease for more than a year without the other’s written consent.2California Legislative Information. California Code, Family Code FAM 1102
The problem with plain community property is what happens at the first death. The deceased spouse’s half does not pass automatically to the survivor. It goes wherever the deceased spouse’s will or trust directs, or through intestate succession if there’s no will.3Justia Law. California Probate Code 100-105 Transferring that half usually requires probate: public, expensive, and slow.
Community Property with Right of Survivorship
This form removes the probate problem while keeping every community property tax benefit. When one spouse dies, the deceased spouse’s half passes to the survivor by operation of law.4California Legislative Information. California Civil Code 682.1 The survivor records an affidavit of death and title transfers. Only married couples and registered domestic partners can use this vesting. For couples without a living trust, it is the vesting estate planning attorneys recommend most often.
Joint Tenancy
Joint tenancy is open to any two or more people, married or not. Its defining feature is the right of survivorship: a deceased tenant’s share passes automatically to the survivor without probate.5California Board of Equalization. Property Ownership and Deed Recording
For a married couple, joint tenancy carries a serious tax cost. When the first spouse dies, only that spouse’s half gets a stepped-up tax basis. The survivor’s half keeps its original basis. In a state where homes routinely appreciate by hundreds of thousands of dollars, that difference can cost tens of thousands in avoidable capital gains tax on a later sale.
Joint tenancy is also fragile. Either spouse can unilaterally sever it by transferring their interest to a third party or even to themselves as a tenant in common, destroying the right of survivorship without the other spouse’s knowledge.
Tenancy in Common
Tenants in common can hold unequal shares (60/40, 70/30, any split). There is no right of survivorship. When one owner dies, their share passes through their will or trust, or through probate if there is no will.
This is uncommon for married couples buying a primary residence together. It shows up in blended families where each spouse wants their share to go to children from a prior marriage, or when one spouse is contributing separate funds and wants that proportion preserved on paper. Any tenant in common can also file a partition action to force a sale, which is worth knowing before choosing this form.
Sole and Separate Property
A married person can take title alone as sole and separate property, with the other spouse signing a deed or written agreement giving up any interest. This is used when one spouse buys with entirely separate funds and both agree to keep the property outside the community estate. The titled spouse can sell or refinance without spousal consent. The tradeoffs: no automatic inheritance right for the non-titled spouse, and no full community property step-up in basis.
Holding Title in a Trust
Many California couples transfer the home into a revocable living trust. A trust isn’t a separate vesting type in the same sense; the property inside it is still characterized as community or separate. But holding title in the trust’s name avoids probate and lets the couple specify what happens after one or both spouses die, such as letting the surviving spouse live in the home for life and then passing it to the children. That control isn’t available through any deed-based vesting alone. The trust document has to be drafted carefully to preserve community property tax treatment.
Why the Step-Up in Basis Usually Decides It
When a property owner dies, the tax basis of their property is adjusted to fair market value at the date of death, which reduces or eliminates capital gains tax on a later sale. For community property, federal law gives the surviving spouse a full step-up on the entire property, both halves, when the first spouse dies.6Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent The IRS confirms the total fair market value of the community property, including the survivor’s half, generally becomes the new basis of the entire property.7Internal Revenue Service. Publication 555, Community Property This applies to both plain community property and community property with right of survivorship.
Under joint tenancy, only the deceased spouse’s half is stepped up. The survivor’s half keeps the original purchase-price basis. A concrete example: a couple buys for $300,000, and the home is worth $900,000 when the first spouse dies.
- Community property: the entire property is stepped up to $900,000. Selling later for $950,000 produces a $50,000 gain, which the $250,000 federal exclusion for a primary residence wipes out entirely.8Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
- Joint tenancy: only the deceased’s half is stepped up to $450,000. The survivor’s half keeps its $150,000 basis, for a combined basis of $600,000. Selling for $950,000 produces $350,000 in gain. After the $250,000 exclusion, the survivor owes capital gains tax on $100,000.
In California’s high-appreciation markets, the community property step-up can save a surviving spouse well into six figures. That is the single strongest reason for California married couples to choose community property vesting over joint tenancy.
What the Deed Has to Say
Vesting has to be stated explicitly on the deed. California purchase transactions typically use grant deeds, which carry implied warranties that the seller hasn’t already transferred the property and that there are no undisclosed liens. Quitclaim deeds carry no warranties and are commonly used for transfers between spouses.
The exact wording on the deed matters:5California Board of Equalization. Property Ownership and Deed Recording
- Community property: “Jane Doe and John Doe, spouses, as community property”
- Community property with right of survivorship: “Jane Doe and John Doe, spouses, as community property with right of survivorship”
- Joint tenancy: “Jane Doe and John Doe, as joint tenants”
- Tenancy in common: “Jane Doe and John Doe, as tenants in common, each as to an undivided one-half interest”
Signers must appear before a notary public to acknowledge their signatures.9California Legislative Information. California Code, Civil Code CIV 1189 You don’t have to sign in the notary’s presence; you can sign beforehand and then appear to confirm the signature is yours. The notarized deed is recorded with the county recorder in the county where the property sits.
Your real estate agent and title officer will ask how you want to hold title, but neither can legally recommend a specific option. That crosses into legal advice. If you’re unsure, talk to a real estate or estate planning attorney before the deed is recorded.
Changing Your Vesting Later
The choice isn’t permanent. California couples can change how they hold title at any time with an interspousal transfer deed. Transfers between spouses, including adding a spouse, removing one after divorce, or switching from joint tenancy to community property, are excluded from property tax reassessment.10California Board of Equalization. Frequently Asked Questions – Change in Ownership The county assessor won’t reappraise the home and your property tax bill stays the same.
One boundary on that exclusion: a transfer between former spouses years after the divorce, with no settlement agreement requiring it, can trigger a partial reassessment. The exclusion covers transfers tied to the marriage or its dissolution, not unrelated transactions long after the fact.
The mechanics of a vesting change are simple. Prepare a new deed, notarize it, record it with the county. The consequences aren’t always simple, though, so a short conversation with an attorney before recording is usually worth the cost.