I have a (straight) friend who is a Realtor and who sells homes in the community where I live. I have always thought her to be rather smart, but she floored me when she called me the other day to say, “I have a gay couple I am working with. Would you mind if I gave them your number and asked them to call you to learn about gay real estate?”
In all my years, I have never known that plots of land or houses had a sexuality, and perhaps some of them could be gay.
Honestly, I had to ask what my well-intentioned but clueless friend really meant.
It turns out that this question and request for advice was not as absurd as it sounded. This gay couple wants to buy a house. But at the moment, they are not married. While in Maryland it is perfectly fine for unrelated/non-married couples to enter into contracts together (unlike neighboring Virginia which actively discriminates against gay people in many hateful state laws), there are differences in how a property can be titled.
I am not an attorney. I don’t even play one on TV. But I agreed to speak with this couple. We talked on the phone last night.
Rather than suggest what they should do, I described what my (then) partner and I did regarding home ownership when we first purchased property together.
At first, our house was titled as “tenants in common.” Unfortunately, that method of titling the house does not allow tax-free pass-through of title to a property to the other owner should an owner die. It also treats each partner’s “share” of the property as something that can be separately sold or mortgaged. There are horror stories where a partner dies and the family of the decedent who by law inherit the decedent’s property force a sale, thus placing the surviving partner in a traumatically difficult situation — losing his love as well as losing his home.
Soon after we realized that mistake, we contacted an attorney and had our house retitled “joint tenants with rights of survivorship.” That means that if I were to die, the ownership of our house would automatically transfer to my partner. My partner and I also had wills made, specifically indicating the other as the primary inheritor of the other’s interests, property, and financial holdings.
Until same-sex marriage became legal in our state and we married this year, that form of titling our house and having our wills prepared was the best that we could do.
Unfortunately, “JTWROS” tenancy has significant tax consequences upon death of one of the owners. If an unmarried co-owner of a property dies, the person inheriting the other owner’s share of the property has to pay taxes on the value of the share of that property. There are horror stories about how the tax bills have been so high that the surviving partner had to sell the property because he couldn’t afford to pay the inheritance taxes.
Then the law of our state changed in 2013. We were allowed to be married. We did so. Yay!
Then the law of our country changed on June 26, 2013, as well, where that discriminatory Section 3 of the so-called “Defense of Marriage Act” was ruled unconstitutional. That paved the way for our marriage to be recognized under Federal law as equal to a male/female marriage.
Immediately after our marriage ceremony in our county courthouse, my spouse and I went to the Land Records Office and filed a new deed indicating title to our property as “Tenants by the Entirety.” That is a form of property title allowable only to married couples. Essentially, it treats a married couple as one thing. When one of us dies, the other automatically becomes sole owner of the property. There are no inheritance taxes because there was nothing to inherit. My spouse as “one” already owns 100% interest in our property.
I also own 100% interest in our property. I know it sounds weird, but this is one case where 100% + 100% = 100%. Go ask an attorney to explain it.
I can’t say which is more special — seeing our marriage certificate or seeing our revised house title as “tenants by the entirety.”
Well, back to the story. I explained what my spouse and I went through. I encouraged these guys to speak with an attorney and have the correct form of title drawn up for them. I avoided asking if they were planning to marry — that is such a huge step; it’s not for me as a stranger to discuss. If they buy their property now and get married later, they can always have a new deed recorded with the title changed like we did.
But I did say that it all comes down to what is so special about being married. In the eyes of our state, we are one.
Life is short: legally protect yourself and your interests.