Check Your Deed

I want to tell you about a piece of paper that most couples do not have. It could save your family a lot of money.

Most of you bought your home a long time ago. Maybe you paid $80,000. Maybe less. 

Today that same house might be worth over a million.

That is a wonderful thing. It is also a tax problem.

Here is what most people do not know.

When one spouse dies, the tax value of your home resets. It jumps up to what the home is worth on that day. 

That is a big deal, because it means your family may pay no tax at all if they sell.

But there is a catch.

How much of your home gets that reset depends on what your deed says.

If your deed says joint tenancy, only half of your home resets. 

Your spouse keeps the old low value on the other half.

If your deed says community property, the whole home resets.

Same house. Same marriage. One word on a piece of paper. 

And a tax bill that can differ by tens of thousands of dollars.

There is a fix. 

It is called a community property agreement. An estate attorney prepares it. 

It does not change your life today. It just makes sure your deed says the right thing.

This is not right for everybody. 

If you are in a second marriage, or if one of you inherited a property, it needs a closer look. 

That is a decision for your attorney.