Huntington Beach, California (PRWEB) March 30, 2015
California law protects and confers rights to husband and wife jointly owning real property. The added spouse is protected from probate and inherits the real property. The added spouse obtains rights of ownership. Ownership change between spouses does not incur transfer tax, property tax increase or transfer tax.
Adding a spouse as owner without a trust should be by deed as “community property with right of survivorship.” “Right of Survivorship” avoids probate on the death of the first spouse. The “community property” designation reduces or eliminates capital gains tax conveying to the surviving spouse a full step-up in basis on real property.
In California spouses are advised to create a trust to avoid probate on the death of the second spouse. Real property must be funded by deed to avoid probate. The non-owning spouse is added as owner by deed when the real property is funded into the trust.
In divorce or dissolution of marriage real property is awarded to one spouse. The spouse awarded real property must be the sole owner of record to sell, refinance or borrow on the property. If the non-owning ex-spouse remains on title as owner he or she may inherit the house on the death of the other spouse. To remove the former spouse, he or she conveys his or her ownership interest by deed to the other spouse.
A deed is a document signed by the owner of the real property to transfer ownership. Deeds are either “warranty deed” “grant deed” or “quit claim deed.” Grant deeds and warranty deeds by law have the owner’s promises he or she has not conveyed the property to someone else and the real property does not have any undisclosed taxes, loans, assessments or liens. Quit claim deeds convey ownership “as is,” including outstanding tax and debt.
The deed must be part of the public database maintained by each county in California. Deed are “recorded” in the county where the real property is located. Recording puts the world on notice of who owns the real estate and is the final word on ownership.
Each county assessor's office in California reviews all recorded deeds for that county to determine which properties require reappraisal of the property tax base. Proposition 13 allows the county assessor to reassess the property to its current fair market value as of the date of ownership change.
Property taxes are based on the assessed value of a property at the time of acquisition, a current market value that is higher than the previously assessed Proposition 13 adjusted base year value increases the property taxes. But there are exclusions.
To obtain the exclusion, the grantee fills out a form for the county assessor entitled Preliminary Change of Ownership Report (PCOR). Examples of husband and wife exclusions are: ownership change into or out of a trust, spouse added as owner, death of first spouse, and transfer pursuant to a divorce settlement or court order.
For more information on spousal transfers contact Mark W. Bidwell. Office is located at 4952 Warner Avenue, Suite 235, Huntington Beach, California 92649. Phone is 714-846-2888. Email is Mark(at)deedandrecord(dot)com. Marketing for trust transfer services is primarily through website http://www.deedandrecord.com.