real estate

Same-sex couples, real estate and the law

 

Many real estate rules, including title laws, are governed by states, so rules for same-sex couples who own property together vary by state.

The DOMA case before the Supreme Court focused on whether the federal government had the right to define marriage as the union between a man and a woman. The court ruled that DOMA was an unconstitutional violation of the equal-protection clause in states that recognize same-sex marriage. With this ruling, existing and future marriages of same-sex couples will be recognized on a federal level.

The case challenged only Section 3 of DOMA. Another part of the law, Section 2, says that states don't have to recognize marriages of same-sex couples even if they are legally married in another state. That section was not the issue considered by the court. For now, little will change in states that don't allow gay marriages.

Click on a state to see a description of how the law affects same-sex couples who own real estate.

 
 

States and districts where same-sex marriage is legal: 

  • Connecticut
  • Delaware
  • District of Columbia
  • Iowa
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • New Hampshire
  • New York
  • Rhode Island
  • Vermont
  • Washington

Marriage is a legal status that provides the spouses a variety of reciprocal obligations, rights and protections. Heterosexual marriages in each state are recognized by all other states, as well as by the federal government.

These states already treat same-sex married homeowners with equal rights. Married couples can take title to the house as spouses regardless of sex or sexual orientation. The overturning of DOMA gives same-sex couples in these states additional rights on a federal level, including claiming the mortgage tax deduction as a couple filing federal taxes jointly.

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States where civil unions are recognized: 

  • Colorado
  • Hawaii
  • Illinois
  • New Jersey

A civil union is a legal status that provides legal protection to same-sex couples in the applicable states only. Civil unions typically are not recognized outside the couples' state of legal residency.

In these states, same-sex couples can own a home with similar rights to married couples. As partners in a civil union, they can hold title through tenancy by the entirety, which is a right that used to be available only to "husband and wife."

With tenancy by entirety, the parties own an undivided part of the property, which means a spouse can't sell his or her interest in the property without the other spouse's signature. Another benefit to this method is that, when one spouse dies, the property automatically reverts to the survivor without going through probate. Tenancy by entirety also protects spouses from creditors because a creditor is not allowed to take away the home to satisfy the debt of one spouse.

Colorado does not have tenancy by entirety. Instead, the state has marital property rules, meaning that any property acquired by a spouse during the marriage belongs to both parties. Partners in a civil union in Colorado have these marital property rights. Hawaii is also a special case in that it also allows domestic partnerships (in addition to civil unions).

Still, couples in these states could remain at a disadvantage with regards to the mortgage tax deduction and other federal benefits. That's because even as the federal government recognizes gay marriage, it remains unclear whether civil unions would be treated as marriages on a federal level.

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States that recognize domestic partnerships :

  • Nevada
  • Oregon
  • Wisconsin

A domestic partnership is a state-sanctioned legal status that allows unmarried couples, heterosexual and same-sex, to formalize their relationships and which extends some state rights to those couples.

These states allow domestic partnerships, but not all grant the same spousal rights to domestic partners when it comes to owning real estate as a couple. In Nevada and Oregon, partners in a domestic partnership have the same title rights as married couples.

In Wisconsin, partners can inherit property without a will. As long as the deed lists them as domestic partners, the property can be transferred automatically if one partner dies. But when partners separate, they don't have the same marital benefits for the division of property.

Washington is a special case: As of 2014, the state will allow domestic partnerships only to couples who are 62 years of age of older. Domestic partners don't have any of the community property rights that married couples have.

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State that just received the green light to resume gay marriages after the ruling on Proposition 8: 

  • California

In May 2008, the California Supreme Court legalized gay marriages. Five months later, voters approved Proposition 8, which banned the marriage of same-sex couples. That law was challenged in federal court and was held unconstitutional. Proponents of Proposition 8 appealed the ruling, and the case eventually ended at the Supreme Court. The high court ruled, separately from the DOMA challenge, that proponents of Proposition 8 had no standing to challenge the lower court's decision. Gay marriage quickly resumed in the most populous state.

California has community property laws, which presume that property acquired during marriage belongs to both spouses. Same-sex spouses in California have the same rights that opposite-sex couples have on a state and federal level.

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States that do not allow same-sex marriage, civil unions or domestic partnerships: 

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • Florida
  • Georgia
  • Idaho
  • Indiana
  • Kansas
  • Kentucky
  • Louisiana
  • Michigan
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • West Virginia
  • Wyoming

Same-sex couples in these states don't have the benefits and protections that married couples get. They are not allowed to hold title with tenancy by entirety in states where this right is available to opposite-sex couples. With tenancy by entirety, the parties own an undivided part of the property, so a spouse can't sell his or her interest on the property without permission from the other. When one spouse dies, the property automatically reverts to the survivor without having to go through probate. Tenancy by entirety also protects spouses from creditors as creditors are not allowed to foreclose on the home to satisfy the debt of one of the spouses.

In states with community property laws -- which say that property acquired after the marriage belongs to both spouses regardless of who paid for it -- the rights are reserved solely for opposite-sex couples.

Generally, same-sex couples in these states own property as tenants in common or as joint tenants with rights of survivorship. These methods are often used by business partners or relatives who own property together. While they grant the homeowners similar rights of joint ownership, they don't offer the full protection that married couples get. The rules in these states won't change with the DOMA ruling.

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