MARRIED / UNMARRIED: Marriage comes with financial benefits, a fact sometimes best recognized by couples who don't or can't get married. Unmarried couples who buy property need extra protections. Marriage allows couples tax-free transfer of property and gifts, as well as some inheritance rights without a will. Same-sex couples who can't officially wed or heterosexual couples who are unwilling to, need to put extra protections into place when buying or sharing a property.
Several states are now offering rights for unmarried couples, while others are taking them away. So local laws need to be carefully considered when choosing a home ownership structure. Colorado is one of the latest states to propose that same-sex partners receive the same state rights as married couples. A vote is scheduled for November.
It's important to note that, even if Colorado permits the forming of a domestic partnership, these laws will be new and not necessarily recognized by the federal government. This makes joint ownership and financial planning more complicated. That's why it's best to work through these issues with an attorney and a financial planner. Unmarried couples need to decide how to title their home, or how to structure ownership, because different structures have different consequences.
Many unmarried couples choose the "joint tenants with rights of survivorship" structure, which allows for an automatic and probate free transfer to a surviving partner. For married couples, who can transfer assets to each other tax free, this structure makes sense. Estate taxes aren't owed until the second party dies. Unmarried couples, however, run the risk of being taxed twice.
For unmarried couples, many attorneys say that"tenancy-in-common," when coupled with a revocable living trust, is a more flexible way to title one's home. This structure allows partners to own unequal interest in the property, but there's no automatic transfer after one dies unless it's designated by the living trust. A properly funded trust, in which assets are titled in the trust, is a hassle-free way to leave property to a partner because you avoid probate.
This information is not to be considered legal advice. We are merely pointing out the need to be cautious in acquiring real property. Everyone, especially unmarried couples, should consult with their attorney to determine their best course of action. Call or email us if we can be of assistance.
http://HomesInDurango.com
http://DurangoRealEstate.biz
No comments:
Post a Comment