We often come across problems that our clients have faced which could have been easily avoided. In this post, we are spotlighting a titling issue. (All client identities have been changed to protect their privacy).
The Problem: Husband and Wife purchase their home in California, taking title to their home as “Community Property.” Fifteen years later, Husband falls ill and passes away. Wife is overcome with grief and cannot bear to live in her family home anymore. She contacts a realtor to try to sell her home, believing she is now the sole owner. Wife is shocked to learn that she cannot sell the property because she doesn’t have full ownership rights. She has no choice but to submit to the costly court system, to try and gain full ownership of her family home.
The Solution: In California, homeowners often receive advice on how to title their property from their real estate broker, lender, or title officer. Unfortunately, Husband and Wife mistakenly believed that holding title to their home as “Community Property” was the best for a married couple. Although California is a Community Property state, titling property as merely “Community Property” does not automatically transfer that title to the surviving spouse once the first spouse passes away.
Wife could have avoided the cost and hassle of submitting to the court system had the title to their home included the following four little words: “With Right of Survivorship.” Using the “Community Property with Right of Survivorship” title would have assured the property automatically passed to Wife as the surviving spouse, and she could have moved forward with selling her home.
Under California Civil Code §682.1(a), when community property is expressly declared in the transfer document to be community property with right of survivorship, such property shall, upon the death of one of the spouses, pass to the survivor, without administration. This means that the property will pass to the surviving spouse without court involvement.
Lesson learned: Contact our office if you are not sure how your home is titled. It may just take something as minor as a few words to save you and your loved ones from costly and time consuming court intervention.