Legal Question in Real Estate Law in California

Re: Add person to a grant deed & Homestead

First, let's be clear that the deed question and the homestead questions are separate and unrelated. I'm sure you understand this, but other fokks read LawGuru answers, and they may need to be alerted.

OK, as to deeds, titles and adding persons. A deed is a one-use-only document like a train ticket. It can't be changed after it is used to transfer title from A to B by execution, delivery (and recording, although that's not essential to the deed's useful life). One cannot change a deed that has already been used.

What you certainly must mean is "How does one add another persont to TITLE so that if one should die the other would get 100% of the home?" This is NOT done by making physical alterations to an existing deed. It is done by the execution and delivery of a NEW deed. If X is the current sole owner of the house, and X wants to make Y a co-owner who will succeed to full ownership upon X's death, X would execute, deliver (and record) a new deed from X as grantor to X and Y as joint tenants. Whether a grant deed or quitclaim deed is used depends upon whether X wants to warrant good title to Y. If the transfer of a 1/2 interest is X's gift to Y, and no money changes hands, it seems to make little real difference.

Here's a glitch! Your question asks how this can be done without any tax problem. The simple answer is IT CAN'T. Transfers of interests in real property of this kind engender three kinds of tax problems: gift, capital gains, and property tax. In exceptional circumstances, it may be possible to avoid one or another of the tax bites. Avoiding all three would be a miracle. Further, these are major, major dollar-item taxes and are virtually impossible to avoid by "forgetting" to declare something, since the tax authorities pick up the necessary information from public records such as recorded deeds.

There is a solution. Set up a trust with the other person as beneficiary. The property will pass with no IRS problems (usually). There may still be a reassessment for property tax purposes, but it will be after your death, not immediately upon the transfer of the half interest.

This whole area is fairly complex, but a lawyer who specializes in estate planning can give you numerical examples that will be convincing! Do a trust!

If two unmarried persons live in, and co-own, the same property, each may record a Declaration of Homestead on his or her part interest. Since they are single (and, I assume, not registered domestic partners), each of them must use the single person declaration. Each declaration then protects ONLY that person's part interest - and that's the way it should be and what the law intends.

Re: Add person to a grant deed & Homestead

The answer to your question will depend on the relationship of the two people at issue. The answer will also depend, with respect to the tax issues, on the value of all assets owned by the person expected to die. These facts will dictate what should be done. Feel free to call or email with any questions. We will be happy to answer them. We practice law out of Newport Beach.