The deed to your real property is often the key to your house. Not literally, but legally. A Deed transfers real property from the current owner (sometimes referred to as the “grantor” or “first party”) to the buyer (sometimes referred to as the “grantee” or “second party”). If there are 2 or more buyers, the Deed will also indicate how real property is owned. How the real property is owned is important – certain rights and responsibilities attach as a consequence – and, as in most planning, same-sex couples face unique issues.
When a piece of real property is owned by more than one person, it is typically titled in one of three ways: as joint tenants with rights of survivorship, tenants in common, or, if the parties are married, tenants by the entirety. Married couples typically choose to own real property as tenants by the entirety because it offers a great (though not absolute) degree of creditor protection and because the real property cannot be transferred without both spouse’s consent. Furthermore, upon death, the surviving spouse automatically becomes owner of the entire real property.
Locally, in Virginia, the District of Columbia, and Maryland, married couples can own property as tenants by the entirety (this is not the case in every state), but in Virginia, where same-sex marriage is not recognized, same-sex couples must look to other forms of ownership. In contrast, District of Columbia laws make clear that tenant by the entirety ownership is available to same-sex couples. And in Maryland, while one statute indicates that a tenants by the entirety ownership is only available to a “husband and wife,” same-sex partners should find that this ownership type is available to them as well, because Maryland now recognizes same-sex marriages, when conducted within Maryland or elsewhere.
So what is a same-sex couple in Virginia to do? Often, same-sex couples who live in states without the option to own property as tenants by the entirety choose as joint tenants with rights of survivorship instead. Joint tenants with rights of survivorship allows the surviving partner to take sole ownership of the real property upon the other’s death, but it does not prevent unilateral transfer of one tenant’s interest in the real property during his or her life. Furthermore, the real property may be subject to one partner’s individual creditor claims.
Availability aside, there are advantages and disadvantages to each kind of property ownership, and all couples should consider the kind of titling appropriate for them and in their circumstances. This should include consideration of creditor liability and estate and income tax issues. In addition, DC and Maryland same-sex couples should discuss whether they want to retitle their property as tenants by the entirety, if they purchased property prior to the availability of that type of ownership. For these and other questions, call the office at (301) 468-3220, or e-mail email@example.com.
– Gary Altman, Esq. and Coryn Rosenstock