Legal Question in Real Estate Law in California

First, severing the joint tenancy, in and of itself, doesn't change things a whole lot....the four of you would continue to be co-owners. Instead of being joint tenants, you'd be tenants in common. By the way, four-person joint tenancies are unusual, but possible. Your title may in fact be held a little differently, possible each couple holding as community property, but each community being a joint tenant with the other. Not really the key issue here.

The key issue is that the four of you need personalized, situation-specific tax and estate-planning advice. Back when real property values were headed straight up, it was rarely wise to give appreciated and appreciating real property to younger family members, as opposed to passing the property by will, or better yet, by trust, since that would bypass probate as surely as making a gift or holding under a joint tenancy with right of survivorship.

Things are not so clear in 2010 for property acquired in 2004, but the potential for huge savings in gift, estate, and/or capital gains taxes assuredly warrants paying an estate-planning expert (attorney and/or CPA) to interview the family members, run the numbers, and make suggestions. I'd be 60-70% confident the advice will be to use a revocable living trust.

Whipple is spot on. The chances that a gift to you of their share while they are still alive would be a good idea from a tax standpoint is about zero.