Inheritance Issues Can Play Role in Real Estate Title

A couple both have children from previous marriages. When they signed a contract to purchase a Tempe home, their real estate agent said that most spouses at the closing will take title to a home as “community property with right of survivorship.”

Do they need to take title in that manner if they want their children from prior marriages to get the home after they both die?

No. The term “with right of survivorship” used in community property with right of survivorship is a term of art meaning that the surviving spouse acquires the deceased spouse’s one-half interest in the property.Upon the subsequent death of the surviving spouse, only the children of the surviving spouse would have an interest in the home.

In this situation they would not want to hold title to the Tempe home as community property with right of survivorship. An Arizona real estate lawyer would suggest that the couple hold title to their home simply as “community property.” In that event, after the death of the first spouse, the children of the first spouse would own 50 percent of the home, and the surviving spouse would own the other 50 percent.

Furthermore, if they both want the surviving spouse to be able to live in the home during their lifetime after the first spouse’s death, they both should provide that in a revocable living trust or other estate plan that the surviving spouse would have a life-estate interest in the home.

After the surviving spouse dies, the proceeds from the sale of the home can be divided 50/50 among the children of the prior marriages.

Advertisements

Tags: , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: