Legal Question in Real Estate Law in California

There are several possibilities. The first is to consider becoming registered domestic partners. This works for same-sex couples, and male+female couples over a certain age. After becoming registered domestic partners, you get the benefits (and burdens) of the community-property laws. This is not for everyone. Further, it doesn't in itself cure the inheritance and succession issues, but it puts you on more familiar ground in fashioning wills and/or trusts.

Of course, you can also get married (maybe). This can have adverse financial consequences on certain pensions and benefits, and there may be other undesirable side effects.

If the sale were structured so that you ended up as joint tenants, the death of either of you would instantly and automatically vest full title in the survivor. This is perhaps the most simplistic approach. The interest of the deceased joint tenant cannot be inherited; it vanishes into legal thin air upon death and the surviving joint tenant(s) own it all.

In older times, another popular method would be to use life estates. The survivor of the two of you would have the right of possession for the rest of his/her life and nothing would pass to either's heirs until you were both deceased. This can still be done, but is cumbersome and may not be the most flexible and powerful method.

Next, remember that if you have a well-written will, it will define exactly who gets what, and when. There's no reason each of you cannot leave a life estate to the other in a will. I hasten to add that drafting wills is not part of my law practice, and I don't know the finer points of bulletproof will drafting.

The final suggestion on this topic is to go to an attorney who specializes in living trusts (or by another name, testamentary trusts) and have either a joint trust or, perhaps better, complementary (coordinated) individual trusts set up. I recommend using trusts because of their flexibility, probate-avoidance and (potential) tax-minimization characteristics. Also, they are well recognized by the courts and reasonably hard to contest.

On a related topic, I highly recommend that you look at the various tax aspects of your proposed transaction. The half interest to be conveyed will get reappraised for Prop. 13 property tax value. Whatever method you use to pass the right of possession to the survivor, and the property ultimately to the chosen heirs, should be done with the capital-gains tax in mind.

Finally, common sense dictates that unmarried folks, unprotected by community-property law, should write contracts between themselves covering their intentions with respect to their property, whether separate or shared. Where one partner pays the other fair market value to buy in, the potential problems are somewhat lessened, but avoiding a partition action between yourselves should also be a concern.

I would be happy to opine on the issue and draft necessary document for a reasonable fee. Contact me directly.