Where two or more individuals own a family home or investment Real Estate property, you as a buyer have a number of choices in taking title to the property. Consideration should be given to your marital situation, estate plan, your financial needs and tax consequences. The following describes one of the various types of property ownership in Arizona and, in the weeks ahead, other examples will be given.
PART ONE: COMMUNITY PROPERTY
As most of us know, Arizona is a community property state. In a marital situation, the presumption is that a legally married couple holds title to real property as community property. As a result, neither of the spouses may deed their interest in the property to a third party without the other joining in the transaction. Community property generally cannot be sold or transferred without the approval of the other spouse. Community property is subject to probate and will be transferred on the death of one spouse as provided in the will. For estate tax purposes, upon death of the spouse, only fifty percent of the value of the property receives a stepped-up basis to the valuation at the time of death. The other fifty percent retains its original purchase basis.
Lat J. Celmins