Title status

[beanmaestro]

My wife and I are buying a sweet low-balled house, and we need to decide what status to hold the title in.

The relevant options appear to be joint tenancy, community property, and community property with right of survivorship. I have a basic understanding of what these mean, but I have no idea of which is a good idea and why. Can someone give us some advice on this?

Since it probably matters, we’re happily married with no kids yet, but planning to start trying next year.

[carli]

I think that if you and your wife have enough assets to own a home together (and are thinking about having kids), you should set up trusts. Any attorneys on the forum, feel free to correct me, but that’s how we were advised to do it many years ago. In our situation, our home is owned in one-half interest in each of our trusts as tenants in common. Congrats on your home purchase…very exciting!

[carli]

I think that if you and your wife have enough assets to own a home together (and are thinking about having kids), you should set up trusts. Any attorneys on the forum, feel free to correct me, but that’s how we were advised to do it many years ago. In our situation, our home is owned in one-half interest in each of our trusts as tenants in common. Congrats on your home purchase…very exciting!

[carli]

I think that if you and your wife have enough assets to own a home together (and are thinking about having kids), you should set up trusts. Any attorneys on the forum, feel free to correct me, but that’s how we were advised to do it many years ago. In our situation, our home is owned in one-half interest in each of our trusts as tenants in common. Congrats on your home purchase…very exciting!

[carli]

I think that if you and your wife have enough assets to own a home together (and are thinking about having kids), you should set up trusts. Any attorneys on the forum, feel free to correct me, but that’s how we were advised to do it many years ago. In our situation, our home is owned in one-half interest in each of our trusts as tenants in common. Congrats on your home purchase…very exciting!

[carli]

I think that if you and your wife have enough assets to own a home together (and are thinking about having kids), you should set up trusts. Any attorneys on the forum, feel free to correct me, but that’s how we were advised to do it many years ago. In our situation, our home is owned in one-half interest in each of our trusts as tenants in common. Congrats on your home purchase…very exciting!

[ugsfugs]

I know a little about this. In CA if you hold as the property as CP, when one spouse dies the basis on the ENTIRE property will be stepped up to fair market value. Meaning you will likely pay much less capital gains tax when you sell it. If the property is not held as CP only the basis of the spouse who dies will be bumped up to FMV. Typically, the basis is what you paid for the property, cost basis. Thus, if the value goes up you pay the difference between your “basis” and what you sell for. However, at death the basis of the property owner is stepped up to FMV.

If you hold as joint tenants (as opposed to tenants in common, you should confirm) and one of you dies, the property AUTOMATICALLY transfers to the other person upon death. As such, if you got divorced but both still owned the property and one of you died, the other’s heirs would get nothing.

None of this matters that much unless you plan to keep the property for a long time or something unfortunate happens.

I might talk to an attorney if you are concerned. I am not sure I have all this perfectly straight.

Also, I believe you can later put property into a trust regardless of how you take title now. Watch what Congress does with the estate tax this year.

[ugsfugs]

I know a little about this. In CA if you hold as the property as CP, when one spouse dies the basis on the ENTIRE property will be stepped up to fair market value. Meaning you will likely pay much less capital gains tax when you sell it. If the property is not held as CP only the basis of the spouse who dies will be bumped up to FMV. Typically, the basis is what you paid for the property, cost basis. Thus, if the value goes up you pay the difference between your “basis” and what you sell for. However, at death the basis of the property owner is stepped up to FMV.

If you hold as joint tenants (as opposed to tenants in common, you should confirm) and one of you dies, the property AUTOMATICALLY transfers to the other person upon death. As such, if you got divorced but both still owned the property and one of you died, the other’s heirs would get nothing.

None of this matters that much unless you plan to keep the property for a long time or something unfortunate happens.

I might talk to an attorney if you are concerned. I am not sure I have all this perfectly straight.

Also, I believe you can later put property into a trust regardless of how you take title now. Watch what Congress does with the estate tax this year.

[ugsfugs]

I know a little about this. In CA if you hold as the property as CP, when one spouse dies the basis on the ENTIRE property will be stepped up to fair market value. Meaning you will likely pay much less capital gains tax when you sell it. If the property is not held as CP only the basis of the spouse who dies will be bumped up to FMV. Typically, the basis is what you paid for the property, cost basis. Thus, if the value goes up you pay the difference between your “basis” and what you sell for. However, at death the basis of the property owner is stepped up to FMV.

If you hold as joint tenants (as opposed to tenants in common, you should confirm) and one of you dies, the property AUTOMATICALLY transfers to the other person upon death. As such, if you got divorced but both still owned the property and one of you died, the other’s heirs would get nothing.

None of this matters that much unless you plan to keep the property for a long time or something unfortunate happens.

I might talk to an attorney if you are concerned. I am not sure I have all this perfectly straight.

Also, I believe you can later put property into a trust regardless of how you take title now. Watch what Congress does with the estate tax this year.

[ugsfugs]

I know a little about this. In CA if you hold as the property as CP, when one spouse dies the basis on the ENTIRE property will be stepped up to fair market value. Meaning you will likely pay much less capital gains tax when you sell it. If the property is not held as CP only the basis of the spouse who dies will be bumped up to FMV. Typically, the basis is what you paid for the property, cost basis. Thus, if the value goes up you pay the difference between your “basis” and what you sell for. However, at death the basis of the property owner is stepped up to FMV.

If you hold as joint tenants (as opposed to tenants in common, you should confirm) and one of you dies, the property AUTOMATICALLY transfers to the other person upon death. As such, if you got divorced but both still owned the property and one of you died, the other’s heirs would get nothing.

None of this matters that much unless you plan to keep the property for a long time or something unfortunate happens.

I might talk to an attorney if you are concerned. I am not sure I have all this perfectly straight.

Also, I believe you can later put property into a trust regardless of how you take title now. Watch what Congress does with the estate tax this year.

[ugsfugs]

I know a little about this. In CA if you hold as the property as CP, when one spouse dies the basis on the ENTIRE property will be stepped up to fair market value. Meaning you will likely pay much less capital gains tax when you sell it. If the property is not held as CP only the basis of the spouse who dies will be bumped up to FMV. Typically, the basis is what you paid for the property, cost basis. Thus, if the value goes up you pay the difference between your “basis” and what you sell for. However, at death the basis of the property owner is stepped up to FMV.

If you hold as joint tenants (as opposed to tenants in common, you should confirm) and one of you dies, the property AUTOMATICALLY transfers to the other person upon death. As such, if you got divorced but both still owned the property and one of you died, the other’s heirs would get nothing.

None of this matters that much unless you plan to keep the property for a long time or something unfortunate happens.

I might talk to an attorney if you are concerned. I am not sure I have all this perfectly straight.

Also, I believe you can later put property into a trust regardless of how you take title now. Watch what Congress does with the estate tax this year.

[SD Realtor]

It is fairly trivial to change the manner of title for residence, primary or not primary. Our rental properties are held in our living trusts but whenever we refi them they are pulled out, refinanced, then put back in. Learning the differences in title is good for you to do, be it on your own or with an attorney. However how you take title at the purchase of the property doesn’t lock you in and it is very inexpensive to change title.

[SD Realtor]

It is fairly trivial to change the manner of title for residence, primary or not primary. Our rental properties are held in our living trusts but whenever we refi them they are pulled out, refinanced, then put back in. Learning the differences in title is good for you to do, be it on your own or with an attorney. However how you take title at the purchase of the property doesn’t lock you in and it is very inexpensive to change title.

[SD Realtor]

It is fairly trivial to change the manner of title for residence, primary or not primary. Our rental properties are held in our living trusts but whenever we refi them they are pulled out, refinanced, then put back in. Learning the differences in title is good for you to do, be it on your own or with an attorney. However how you take title at the purchase of the property doesn’t lock you in and it is very inexpensive to change title.

[SD Realtor]

It is fairly trivial to change the manner of title for residence, primary or not primary. Our rental properties are held in our living trusts but whenever we refi them they are pulled out, refinanced, then put back in. Learning the differences in title is good for you to do, be it on your own or with an attorney. However how you take title at the purchase of the property doesn’t lock you in and it is very inexpensive to change title.

[Author]

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