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ALL GAY COUPLES SHOULD KNOW BEFORE BUYING A HOME
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10 Reasons for Unmarried Partners to Own Property as Joint
Tenants
10. IT'S SIMPLE. Joint tenancy is easy
to achieve. It can be accomplished simply by including a
clause referring to that form of ownership in the title
to the property.
9. SHOWS COMMITMENT. Owning a home as joint
tenants can demonstrate the long-term commitment in your
relationship.
8. FINANCIAL SECURITY. Becoming joint tenants,
or homeowners in general, usually makes more long-term financial
sense than paying rent together year after year. Home ownership
is an investment that can provide financial security for
both partners and even partially fund your retirement. As
joint tenants, both partners can tap into the equity in
the home in case you need money for other purposes in the
future.
7. TAX BENEFITS. Home ownership can provide
significant tax benefits to the couple. These benefits can,
however, be more complicated when the couple is unmarried.
A married couple that owns a home can take the mortgage
and property tax deductions on their joint tax return. An
unmarried couple cannot file a joint return and will have
to figure out how to divide those tax benefits. If it makes
more economic sense for one party to claim the deductions,
the other should be compensated in some other way, such
as by being responsible for fewer household expenses.
6. PREVENTS GIFT TAXES. If only one member of an
unmarried couple owns the home and he or she lets the other
party live there rent-free, the IRS may consider that arrangement
a gift to the nonpaying partner. If that gift is worth over
$10,000 a year, or the equivalent of about $833 rent per
month, the giver-or the homeowner-will have to pay gift
taxes. This tax complication can be avoided, however, if
the homeowner charges the other partner rent and keeps accurate
books and records reflecting the payments.
5. SHARED ASSET. Purchasing your house
as joint tenants means that you equally share ownership
of your home, which is perhaps the greatest asset you will
own in your lifetime. Equal ownership of assets can create
a balance of power in the relationship
4. SHARED DEBT. As joint tenants, you are
most likely also joint debtors. If both partners are named
on the mortgage note, neither is saddled alone with the
corresponding debt and they both share equally in this financial
burden.
3. PROOF OF OWNERSHIP. If the relationship
does not last, each party has sound legal proof of his or
her entitlement to an equal share of the property.
2. PREVENTS FINANCIAL HARDSHIP. On the
other hand, if the relationship does not last, neither party
can simply walk away and leave the other solely responsible
for the mortgage, since they are joint debtors and share
that financial obligation equally.
1. RIGHT OF SURVIVORSHIP. When one joint
tenant dies, title to the property automatically passes
to the other, without the need to go through the formal
probate process. If only one member of an unmarried couple
holds title to the property and does not have a will granting
the property to the other party, it would pass to the deceased's
legal heirs, who are usually family members, despite any
contrary intentions on the part of the couple.
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