Understanding the Right of Survivorship in California

When it comes to property ownership, the way you choose to hold title to your real estate has major implications for the future. Understanding the Right of Survivorship in California is an important part of estate planning. In this blog post, we’ll discuss how to best hold title to real estate, along with the strengths and limitations of the Right of Survivorship in California.

What is the Right of Survivorship?

The Right of Survivorship is a legal principle that ensures property automatically passes to the remaining co-owner(s) when one owner dies. This avoids the need for a probate court proceeding – the lengthy, public, and costly legal process that determines property ownership after death. 

In California, this principle applies to specific types of joint property ownership, including joint tenancy and community property with the right of survivorship.

Joint Tenancy with Right of Survivorship

Joint tenancy is a form of co-ownership where two or more people own real property equally, with each having an undivided interest in the whole property. A key characteristic of joint tenancy is the Right of Survivorship. 

When one joint tenant dies, their interest in the property automatically passes to the surviving joint tenant(s). This means that ownership is not part of the deceased owner’s estate and does not require probate to transfer.

For example, siblings John and Mary are joint tenants of a house. If John dies, sister Mary automatically becomes the sole owner of the property, avoiding the need for probate.

Community Property with Right of Survivorship

The second type of ownership that includes the Right of Survivorship is community property with Right of Survivorship. California is a community property state, meaning that most property acquired during marriage is considered equally owned by both spouses. 

However, state law also allows couples to hold community property with the Right of Survivorship. This form of ownership operates similarly to joint tenancy, with the surviving spouse automatically inheriting the deceased spouse’s share upon death.

For example, let’s say that married couple Joe and Jane own a condominium as community property with the Right of Survivorship. If Jane dies, Joe automatically becomes the sole owner of the condo without going through the probate process.

Tenants in Common

Tenancy in common is a third way of holding title. This gives each co-owner of a property an undivided, transferable interest in the property that is typically proportional to their contribution to the purchase. 

With tenants in common, there is no Right of Survivorship. Each tenant is entitled to sell their share of the property to another person, unless they previously signed an agreement waiving their right to do so. But the deceased owner’s share does not automatically pass to the surviving owners.

How to Establish the Right of Survivorship

To create joint tenancy or community property with the Right of Survivorship in California, specific language must be included in the property deed. This typically involves explicit phrases like “as joint tenants with right of survivorship” or “as community property with right of survivorship.” 

An experienced real estate attorney or estate planning lawyer can ensure the deed is correctly drafted and aligns with your estate planning goals.

Advantages of Right of Survivorship

Some individuals may wish to arrange their estate planning by using the Right of Survivorship. This strategy carries advantages and disadvantages.

First, here are three advantages:

• Avoids Probate: Since the property transfers automatically upon death, there’s no need for probate. This can save time and reduce legal expenses.
• Certainty and Simplicity: The transfer of ownership is straightforward, with no need for legal intervention or court rulings.
• Immediate Access: The surviving owner has immediate access to the property, providing stability during a challenging time.

Disadvantages of Right of Survivorship

Next, let’s examine the problems with this strategy:

• Lack of Flexibility: The automatic transfer might not align with broader estate planning goals, particularly if other beneficiaries were intended to inherit a share of the property.
• Potential Tax Implications: In some cases, the transfer of property via the Right of Survivorship could have tax consequences, such as impacting estate taxes, capital gains taxes, or property tax reassessment under California’s Proposition 13.
• Creditor Issues: If one joint tenant has debts, creditors may claim that owner’s interest in the property, affecting the surviving tenant’s ownership.

In California, many people opt to create a revocable living trust to avoid both probate and the potential disadvantages that come with planning by Right of Survivorship. Consult an experienced estate planning attorney to develop a strategy best suited to your circumstances.

The Right of Survivorship is a powerful legal tool for property co-owners in California, allowing for seamless property transfer without the need for probate. However, it’s essential to understand the benefits and potential drawbacks to make an informed decision. 

If you need help understanding the Right of Survivorship in California, feel free to contact our law firm.

Law Offices of Daniel A. Hunt

The Law Offices of Daniel A. Hunt is a California law firm specializing in Estate Planning; Trust Administration & Litigation; Probate; and Conservatorships. We've helped over 10,000 clients find peace of mind. We serve clients throughout the greater Sacramento region and the state of California.