How Domestic Partners Can Hold Title to Property in Arizona

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In today’s world, fewer marriages exist and more people are cohabitating in committed relationships for various reasons.

Arizona’s community property laws do not apply to the ownership of real property between unmarried individuals.  This limits the way in which title can be held, but also raises additional issues, such as what happens to the property upon the death of one of the individuals.

If two people purchase real property together, each as to an undivided one-half interest, without any other designation in the Deed, the property is held as Tenants in Common. Either of the owners can theoretically transfer their one-half interest in the property at any time during their lifetime. Their creditors can encumber their interest in the property.  If a person dies, their half of the property goes to their heirs under the intestate laws of Arizona unless they had a Will.  Even if they had a Will, it doesn’t mean they had to leave the property to the co-owner. Property owners may find themselves owning property with another co-owner(s) that they do not know.  In any event, there will need to be a probate on the death of the deceased owner.

Joint Tenancy with Right of Survivorship allows the owners of the property to each have a survivorship right in the property if one of them dies.  For example, if one joint tenant dies, the property will pass to the other joint tenant by recording an original death certificate of the deceased joint tenant in the county recorder’s office where the property is located. This, however, eliminates any rights that the deceased joint tenant’s heirs will have in the property. The ultimate disposition of the property is controlled by the surviving joint tenant.

Property can be owned and managed by both owners by use of trusts. Each owner can have a trust that owns a one-half interest in the property as a tenant in common with the other half owner’s trust.  The trusts can provide that the property on the death of one owner passes to the other owner, without the need for a probate. The contingent beneficiary of the trust can be the deceased owner’s family members.

At times, people go into a relationship already owning a house and both parties live in the house, in some cases for a long period of time.  When the owner of the house dies,  the deceased owner may want the other member of the relationship to live in the house, maybe for their lifetime.  A trust can help with this arrangement.  The original owner of the house can put the house into a trust that stays in trust for the benefit of the other member of the relationships for life, or until that person needs to  move out or wants to move out.  Every so often, provisions are made that require the person staying in the house to pay for the mortgage and maintain the house.  Certain funds, such as life insurance proceeds are put in trust for the survivor to help pay the cost of the house.

 

 

Topics:  Civil Unions, Cohabitation Agreements, Domestic Partnership, Marriage, Property Owners, Tenants

Published In: Family Law Updates, Residential Real Estate Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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