Holding Title to Real Estate in California: Common Mistakes That Can Undermine Your Estate Plan

If you own a home in California, there’s a good chance your estate plan rises or falls on a single piece of paper you haven’t looked at in years: the deed.

That’s not an exaggeration. Your trust, will, and powers of attorney might be beautifully drafted, signed, and organized in a binder… and still fail to do what you intended if the way you hold title to your real estate doesn’t match the plan.

Why? Because real estate doesn’t “follow your wishes.” It follows your vesting (how title is held) and the rules attached to that vesting. In California, those rules can trigger probate, create tax surprises, expose the property to someone else’s creditors, or accidentally disinherit the people you meant to protect.

Below are the most common title/vesting mistakes we see—and what you can do to fix them before they turn into an expensive mess for your family.

Mistake #1: Assuming Your Trust Controls the House—When the Deed Never Made It into the Trust

This is the #1 issue, and it’s usually accidental.

Someone signs a revocable living trust, feels relief, and then… never deeds the home into the trust. Years later, the trust exists, but the house is still titled in the individual’s name. That means the property may still require probate (or at minimum a more complicated court process) depending on the full picture.

Why it happens:

• The trust was created during a busy life moment (new baby, retirement, health scare).
• You didn’t understand that “funding” the trust is a separate step.
• Refinancing later changed title back into individual names and no one re-transferred it.

Fix: Confirm what your current deed actually says (not what you think it says) and make sure the vesting aligns with your plan.

Mistake #2: Trying to “Avoid Probate” by Adding a Child to Title

This comes from a good place: “I’ll just put my son/daughter on the deed so it’s easy when I die.”

In practice, it can backfire fast.

Potential consequences:

• You are gifting part of the house right now. That can have gift tax reporting consequences even if no tax is due.
• You may expose the home to your child’s problems. Creditors, lawsuits, bankruptcy, divorce—your child’s “life problems” can become a lien or claim against your home.
• You can create a tax trap. Many families unintentionally lose favorable tax treatment by choosing the wrong vesting.
• You can trigger property tax reassessment issues if the transfer doesn’t fit within an exclusion or is handled improperly (and Proposition 19 made inherited-property tax planning more complicated than it used to be). 

Fix: If the goal is probate avoidance, there are cleaner tools—proper trust funding, correct spousal vesting, and in some cases a carefully considered transfer-on-death deed (with strict rules, discussed below).

Mistake #3: Married Couples Defaulting to Joint Tenancy Without Understanding the Tax Cost

In California, many married couples hold the title as “Joint Tenants.” It’s common, it sounds right, and it avoids probate at the first death because the survivor automatically becomes the sole owner.

But here’s the issue: joint tenancy is often a tax loser compared to community property.

Under federal tax rules, community property can receive a full step-up on the first spouse’s death in many situations—including the survivor’s half—while joint tenancy generally only steps up the deceased spouse’s portion. 

Translation: the wrong vesting can mean a much bigger capital gains tax bill if the surviving spouse later sells the house.

Better option to explore: Community Property with Right of Survivorship (CPWROS). It combines survivorship (probate avoidance at the first death) with community property treatment, and it is specifically recognized in California. 

Fix: Married couples should review whether their current vesting matches their tax and estate goals. This is one of those “small paperwork changes” that can save a family a painful amount of money later.

Mistake #4: Tenants in Common Without a Plan (or Without Knowing It)

Sometimes people hold title as Tenants in Common and don’t realize what that means.

Tenants in common does not include a right of survivorship. When one owner dies, that owner’s share goes to their heirs (through their trust, will, or probate), not automatically to the other co-owner.

This can be fine—sometimes it’s exactly what you want, especially with second marriages or unequal contributions. But if you expected “it all goes to my spouse,” tenants in common can create a surprise.

Fix: Confirm whether your deed says joint tenancy or tenants in common. Those words matter more than most people realize.

Mistake #5: Deeds That Were Never Properly Recorded—or Were Recorded Incorrectly

California is a recording state. Recording puts the world on notice and establishes priority in the chain of title. In general, earlier-recorded documents tend to have priority over later ones (though there are exceptions). 

Common problems we see:

• Deeds signed but never recorded.
• Incorrect legal descriptions (street address is not a legal description).
• Misspelled names or inconsistent middle initials.
• Wrong entity name (LLC vs individual).
• Missing notarization (most documents need to be notarized to be recorded). 

Fix: If a deed is meant to change ownership, assume it must be done formally and recorded properly. Sloppy paperwork in real estate tends to show up at the worst time—sale, refinance, disability, or death.

Mistake #6: “We Put the House in the Trust” … But the Mortgage Company Will Call the Loan, Right?

This fear keeps a lot of people from funding their trusts properly.

Most residential mortgages include a due-on-sale clause. But federal law limits when a lender can enforce it. One key protection: a lender generally may not enforce a due-on-sale clause for a transfer into an inter vivos trust where the borrower remains a beneficiary and the transfer doesn’t change occupancy rights. 

That said, not every transfer is protected, and banks can still create headaches if things aren’t handled cleanly.

Fix: Don’t let fear stop you from doing the correct planning. Do it the right way, and coordinate the deed, trust language, and lender considerations.

Mistake #7: Using a California Transfer-on-Death Deed Without Following the Rules (or Without Understanding the Tradeoffs)

California allows a Revocable Transfer on Death Deed (TOD Deed), and it can be useful in limited situations—but it’s not a “quick and easy” workaround anymore.

Key realities:

• It has strict execution and recording requirements. For example, it is not effective unless recorded within 60 days of notarization. 
• It has continuing statutory requirements and is currently scheduled to remain in effect only until January 1, 2032 unless extended. 
• Witness issues can raise challenges (including presumptions of wrongdoing in certain circumstances). 
• It can conflict with a trust-based plan if you “stack” tools without coordinating them.

When TOD deeds tend to go wrong:

• Someone signs one as a DIY document and records it late (or not at all).
• It names beneficiaries without considering incapacity planning, creditor protection, or equalization among children.
• It creates confusion because the trust says one thing and the TOD deed says another.

Fix: Treat a TOD deed like real estate surgery, not a sticky note. If you’re going to use one, it should fit into a coherent plan.

Mistake #8: Outdated Title After Marriage, Divorce, Death, or a Refinance

Life changes—title often doesn’t.

Events that should trigger an automatic “title check”:

• Marriage or registration as domestic partners
• Divorce or separation
• Death of a spouse or co-owner
• Buying a new home
• Refinancing
• Forming an LLC or changing your business structure
• Moving out of state (community property and tax issues can shift)

Fix: Any time your life changes, assume your estate plan and title need a quick audit. It’s cheaper than fixing it later.

Mistake #9: Ignoring Property Tax Consequences When Transferring Real Estate

In California, property tax planning is a real part of estate planning.

Proposition 19 changed the rules for parent-child transfers and tightened the ability to keep a low assessed value in many inherited situations. That means a transfer that seems harmless can raise the tax bill dramatically—sometimes making it impossible for heirs to afford keeping the property.

Fix: Before changing title—especially involving children—get advice that considers both estate planning and property tax planning.

A Simple “Title Checkup” You Can Do This Week

If you want a practical next step, do this:

1. Pull a copy of your most recent recorded deed (county recorder or title company).
2. Confirm the vesting language (exact words matter).
3. Compare it to your estate plan:
   • Does the trust expect the house to be owned by the trust?
   • Are beneficiary designations consistent with survivorship language?
4. If married/partnered, ask whether your vesting supports both probate avoidance and tax goals.
5. If you added someone to title “for convenience,” pause and get advice before it becomes permanent damage.
6. Don’t guess—have a professional review it.

How Filippi Law Firm Can Help

At Filippi Law Firm, P.C., we routinely see families who did “most of it right” but missed the title piece—then their loved ones pay the price in delays, taxes, and legal fees.

Our approach is straightforward:

• We review your current deeds and vesting.
• We align your real estate title with your trust-based (or probate-avoidance) plan.
• We help you avoid common California-specific traps—like the wrong spousal vesting, accidental gifts, TOD deed defects, and Prop 19 surprises.

If you want, tell us what you own (primary residence, rental, vacation property), how it’s titled today, and what you want to happen when you’re gone. We’ll help you get the title lined up so your estate plan works the way you think it does.