Buy­ing as an LGBT cou­ple

Take steps to pro­tect your rights to your home

GA Voice - - News - By Laura Dou­glas-brown lbrown@the­gavoice.com

Buy­ing a home with a part­ner can be a thrilling time in your re­la­tion­ship. But it is also an im­por­tant time to talk frankly about how much each of you will con­trib­ute fi­nan­cially to down pay­ments, mov­ing costs, mort­gage, home up­keep and more.

And while it isn’t as ro­man­tic as pick­ing out paint col­ors for your new shared bed­room, it’s also crit­i­cal to dis­cuss clearly what you would do with the prop­erty you are about to buy if you break up or when one of you dies.

It’s im­por­tant for all cou­ples, but es­pe­cially im­por­tant for same-sex cou­ples, who can’t get mar­ried in Ge­or­gia. That means you can’t rely on a di­vorce court to di­vide your prop­erty if your re­la­tion­ship ends, and un­less you have wills, you will be con­sid­ered le­gal strangers for in­her­i­tance pur­poses.

“In the event of a breakup or death, one part­ner may find him­self or her­self out of a home — un­less the cou­ple had the proper le­gal doc­u­ments drawn up,” warns the Hu­man Rights Cam­paign, the na­tion’s largest LGBT group.

Here are three com­mon ways to ti­tle a home and what they can mean for same-sex cou­ples. Keep in mind that this is only an over­view, and it is cru­cial to dis­cuss your per­sonal fi­nan­cial sit­u­a­tion with an at­tor­ney be­fore de­cid­ing which op­tion is best for you. It is also vi­tal to have a will, pow­ers of at­tor­ney and other es­tateplan­ning doc­u­ments.

Sole own­er­ship:

If the house is in one part­ner’s name only and that part­ner dies with­out a will, the other part­ner may be left with no le­gal right to the prop­erty at all.

If the house is ti­tled in one part­ner’s name and left to the other part­ner in a will, the will still has to go through pro­bate. It is pos­si­ble an­other sur­vivor — for ex­am­ple, a fam­ily mem­ber who isn’t sup­port­ive of your re­la­tion­ship — could con­test the will.

Joint Ten­ancy with Right of Sur­vivor­ship:

If right of sur­vivor­ship is spec­i­fied, when one part­ner dies, the other be­comes the only owner. While HRC notes that this is an op­tion many cou­ples choose and many fi­nan­cial ad­vis­ers rec­om­mend, Lambda Le­gal — a na­tional LGBT le­gal ad­vo­cacy group — cau­tions that there are “po­ten­tially neg­a­tive” tax is­sues to con­sider.

“First, the en­tire house’s value will be con­sid­ered in the fed­eral es­tate tax cal­cu­la­tion. The bur­den will be on the sur­viv­ing part­ner to prove con­tri­bu­tion to the as­set up to 50 per­cent of the fair mar­ket value of the house,” Lambda states. Lambda Le­gal: Tax Con­sid­er­a­tions for Same-Sex Cou­ples www.lamb­dale­gal.org/pub­li­ca­tions/ tax-con­sid­er­a­tions HRC: Hous­ing for LGBT Peo­ple: What You Need to Know about Prop­erty Own­er­ship and Dis­crim­i­na­tion http://bit.ly/ZFdYtu “If the sur­vivor can­not prove hav­ing made such a con­tri­bu­tion, the en­tire value will be in­cluded in the es­tate tax cal­cu­la­tion, which could trig­ger es­tate taxes.”

There could also be tax im­pli­ca­tions if the ti­tle is orig­i­nally in one part­ner’s name, then changed to joint ten­ant with right of sur­vivor­ship.

“The other part­ner may have to pro­vide proof of con­tri­bu­tion to the as­set or the IRS might look upon the re-ti­tling as a ‘gift’ of half the value of the house, which could trig­ger gift tax li­a­bil­ity,” Lambda states.

Ten­ants in com­mon:

With this choice, part­ners spec­ify in their wills who they want to in­herit their shares of the prop­erty. It could be the other part­ner or any­one else.

“For ex­am­ple, some cou­ples who have chil­dren from a prior re­la­tion­ship choose to ti­tle their prop­erty this way so it can au­to­mat­i­cally pass to their chil­dren upon their death,” HRC notes. “Oth­ers who place their home in a liv­ing trust may choose this op­tion as well.”

While joint ten­ancy as­sumes that each per­son owns an equal share, you could use ten­ants in com­mon to spec­ify that one part­ner made a larger fi­nan­cial con­tri­bu­tion and thus owns a larger per­cent­age of the prop­erty.

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