So … just what does “types of vesting” mean concerning property?

According to Investopedia,

“vesting is a legal term that means to give or earn a right to a present or future payment, asset, or benefit. It is most commonly used in reference to retirement plan benefits when an employee accrues nonforfeitable rights over employer-provided stock incentives or employer contributions made to the employee’s qualified retirement plan account or pension plan. Vesting also is commonly used in inheritance law and real estate.”

When it comes to real estate, property may be vested in several ways. In California, these fall into three main categories: Sole Ownership, Co-Ownership, and Trusts. According to First American Title, vesting is

The names, status and manner in which title of ownership is held with a fixed or determinable interest in a particular parcel of real property; also that portion of a title report or policy setting forth the above.

Types of Vesting

Here’s a breakdown of the three and some examples to explain how they work:

Sole Ownership:

Sole Ownership describes property ownership held by a single individual. For example, the law considers property owned by a single man or woman, unmarried man or woman, widow or widower, or described as a person not legally married or in a domestic partnership as “sole ownership.” But, in the case of a married man or woman, the property must be his or her sole, separate property in their name alone. So, in this case, the title company typically requires the spouse or domestic partner to expressly “disclaim or relinquish” their rights to the property, and the sole individual may dispose of it however they wish.


Co-ownership is a property title held by two or more individuals. There are four types of co-ownership:

  • Community property refers to property owned together by domestic partners or a married person with their spouse. And, the State of California presumes real property purchased by a married couple or domestic partners to be community property unless otherwise specified. So, that means both partners/spouses must sign documentation for the purchase. And, each owner claims the right to dispose of their half of the property in their will.
  • Community Property with Right of Survivorship means a form of community property vesting when held by spouses or domestic partners. While similar to community property, in this case, the entirety of the property goes to the surviving spouse/domestic partner.
  • Joint Tenancy describes vesting similar to community property, the joint tenancy form of vesting concerns property held between two or more individuals who may or may not be married or domestic partners in equal interest or shares. Joint tenancy also has the “right of survivorship” attached. For example, a brother and sister, mother and two sons, or four friends could own a home together. When a joint tenant dies, the property automatically passes to the surviving tenant(s). That means that property held in joint tenancy is not subject to being disposed of in a will. Sometimes, there are joint tenants who, while married, are not married to each other. In that case, the title company typically requires the consent of the non-owning spouse(s) to consent to the arrangement.
  • Tenancy in Common — Different from a joint tenancy where each party owns an equal share, tenants in common own undivided fractional shares, which may or may not be of the same quantity or for the same length of time. For example, in an investment property held by three people in differing amounts, each tenant receives the allocation of income and bears the portion of expenses matching the percentage of ownership. Each co-tenant has the right to sell, lease, or leave their share in their will without the other owner’s consent.
Trustees of a Trust:

A trust vesting is where a trust holds the property’s legal title. It is held and managed for the benefit of the persons specified in the trust as its beneficiaries. For example, a trustee manages property for minors until they come of age, or a family may place properties together in trust to benefit both living and surviving family members as a form of protection from probate issues. A more complex form of ownership, trusts may include multiple properties, stocks, bonds, and other fiduciary assets.

Purchasing Property

If you intend to purchase property via a specific vesting arrangement, be sure to let us, as your real estate professionals, know. That way, we’ll prepare any required paperwork ahead so as to not hold up the closing on your property.

Buying property in Laguna Beach has many benefits. Regardless of how you intend to vest the property, if you’re interested in purchasing a home in Laguna Beach, take a look at these Top 10 Luxury Homes in Laguna Beach on the market right now.