Legal Question in Real Estate Law in California

Re: Which form to use

The form would be a deed.

In California, the main choices are a quitclaim deed and a grant deed. Either would work to convey a half interest (or some other fractional share) in your residential property. The main difference is that by using a grant deed, the grantor warrants good title, etc. to the grantee while with the quitclaim no warranties are made. In fact, many times quitclaims are used when the grantor knows he owns no interest in the property, but the grantee (or grantee's lender) isn't certain of that and wants to be certain.

Be sure to write the proper legal description of the property into the deed, including the identity of the California county.

A more important matter to address is how the resulting title will be held -- as joint tenants or as tenants in common -- and Mr. Lupoff has given you some things to consider on that issue.

There are some other considerations, including the property and income tax aspects of the transaction. The value of the transferred interest will be subject to step-up in value for most tax purposes in most transactions. Also, if the property is financed, a partial transfer may trigger a due-on-sale clause, if there is one.

Finally, why do this? If you have sold a half interest for fair market value, maybe it makes sense, but you should have a written agreement with the buyer covering your future relationship. If it is a gift, consider the gift tax issue, and whether circumstances in the future could bring regret; you also should have a written agreement with the beneficiary covering the co-ownership, including mortgage payment, maintenance, tax and insurance responsibility. Occasionally, we find clients wanting to make gifts of property to hide assets from creditors or agenices like MediCal. We advise against these deals because the anti-fraud laws can and will un-do them, and they're hard to conceal since everything goes into the public record.

Re: Which form to use

I do not know the actual name of the form, but any title company can help you out.

One thing to note is that when you add someone to title you must decide whether you want a joint tenancy or tenants in common. A joint tenancy is where there are two or more people on title and if one person dies, his interest automatically passes to the others on title, outside the will or trust. Tenants in common is where each person owns an actual percentage of the property and it requires a trust or will to properly pass to a beneficiary/heir. E.g., A owns 40% of Green Acres and B owns 60%. A dies. His 40% will then pass to A�s son and A�s son now owns 40%. I hope this information helps.