What is the best way to vest my title on my first deal?

Question

My Wife and I are purchasing our first deal in sunny southern California with our VA loan and intend to live in the home for 1-2 years while doing repairs, what is the best way to vest the title of the home?

Bill Gulley · Answer

There are no tax differences from being vested in title, at least not until you die and then, follow David'd advice, title transfers automatically with rights of survivor to your spouse. VA is a personal loan so I assume your personal taxes were the question, commercially, other arrangements can be made. Good luck :)

Kyle J. · Answer

I usually do it as Husband & Wife as Community Property with Right of Survivorship. Here's some more info on the different options though:

Jay Hinrichs · Answer

@Jason Allen   CRAP I misread your thread subject I thought you asked   HOW do I VETTE the title Not VEST the title.. as stated above most folks vest H W Joint tenants in CA.. if you want to vest in your own name then wife needs to sign quit claim deed in CA... in ORYGUN for instance we can vest in a singular name even though we are married with no quit claim deed.. each state is a little different in that regard.

sorry for the long winded answer about a question you did not ask.. but now you know what to look for when you get your title report... But Jeff read it the same way he was giving you advice on how to look at title .. NOt how to vest title.  lOL.. Ok I have to go to work...

David O · Answer

Assuming you like your wife, I would vest as "husband and wife as joint tenants with full rights of survivorship". If anything ever happened to either of you, probate would not be needed regarding the house, in CA.

Jay Hinrichs · Answer

@Jason Allen  out here on the west coast you will get a preliminary title report.. you read that.. most properties in a subdivision setting are pretty vanilla when it comes to title.. the lender is NOT going to close is there are any title issues that would harm you or them.

you can then sit down with your Realtor or Escrow officer and read through it together.. it would not be very common to retain an attorney for this unless for some reason there is something that really raises red flags.. again the lender will not loan on anything that has adverse title issues.

common things to look for though would be

1. CCR's  many though are old and outdated if the properties were created in first half of the century. talks of livestock and Race.. all not allowed today.

2. HOA if you have an HOA you want to check to see if its active and what the fee's are.. the title company will do this as well.

3. Easements.. that could adversely affect the property.. again if this is lot and block in a subdivion the worse case would be some utl easement.

4. mineral rights.. again in a lot and block subdivision setting mineral rights are moot.. many times they are owned by the govmit.. but have no bearing on your title being marketable.

those are a few I see as common place exceptions..

pretty straight forward as Jeff stated ..

Rick H. · Answer

Your VA will require you to acquire in either just the vet's name or both spouse's . names, depending on preferences and loan qualifications. You may vest as H&W@JT or H&W@CPWROS.

There are no real tax advantages one way or another at this point of time. Interest deduction will be from the IRS Form 1098.

Later, when you've gained equity and perhaps other assets, assets protection schemes and strategies may come into play and be attractive. This is where estate planning and business entities must interface and an investment in training will be smart money.

Ultimately, I created a corporation to act as trustee of separate title title holding trusts, one for each property. It's very practical, easy to implement and not too cumbersome. There are plenty of disadvantages to my structure for someone who requires individual vesting for conventional bank loan qualifications and other will probably argue that the asset protection level is lower than other offshore strategies (true) however I'm a stand up guy and don't run from trouble.

Best advise: keep it simple for now and focus on deal flow (and cash flow) until you have something to protect from taxman and the crazy people.

Jason Allen · Answer

Awesome!  Thank you Bill. We are looking into property #two by Xmas.

Jason Allen · Answer

Thank you Kyle. Another question would be which would offer the best tax benefit?  Community property or Joint tenant? We are a single income family, six figures.

Jason Allen · Answer

Haaahaa!! Thank you all for the great info. I definitely learned somethings. Dave thank you for your answer that is what I was looking for and you are correct, I lLove my wife very much! I let her pick this first investment. Thank you again.

Jeff Greenberg · Answer

That is what title companies are there for.  It is their job to check out the title and to provide insurance on that title.  Have a lawyer look over the exclusions to make sure that you are not getting invisible protection.

What is the best way to vest my title on my first deal?

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