I have two homes. One is in Santa clara county and the other is in San Bernadino county, both in California.
Estate Planning Attorney
Generally, when you are adding your spouse or RDP, it is considered a gift and would therefore be exempt from transfer tax. Cal. R&T 11930. Additionally, your property tax value will not be reassessed. However, because your relationship is not recognized as a spousal relationship for federal/IRS purposes, you are not making an interspousal gift (exempt from gift tax). Depending on the value(s) of the property, this could dramatically affect your gift tax situation. As such, you really ought to speak with someone who is knowledgeable about estate planning, real property, tax, and RDP issues. You can structure the transaction such that you may avoid excessive gift and estate tax. Since the Supreme Court has decided it will take on the issues of DOMA and CA Prop. 8, the gift tax issue may go away eventually.
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In Missouri, I would encourage you to file a beneficiary deed that would provide the property to your partner upon your death as a non-probate transfer. In doing so, if your relationship with the partner terminates, you may then terminate the beneficiary deed though subsequent filing and you have no tax consequences at all. Good luck and check CA law to see if this is available.
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As was mentioned there are gift tax issues involved here. You don't have to worry about the county transfer taxes, but the federal transfer taxes (estate and gift tax) can be very steep. That said, there may not be a real issue. Here is what you have to consider. If you add your partner to the title you are making a gift of 1/2 of your equity in the property. If the house is paid off this is probably a big gift. If there is a lot of debt on the house the gift may not be that big. This year, for the next 11 days, you may give away $5,120,000 with no gift tax. However, to the extent your gift is over $13,000 it will burn up your lifetime credit that is set to go back to $1,000,000 in 11 days. If your estate, plus the total of all the taxable gifts you made during your lifetime, is under $1,000,000 then you will have nothing to worry about. But if it is over $1,000,000 then it will be taxed at about 50%. Regardless of the tax issues, you should sit with a lawyer that is experienced in working with same sex couples. There are different rules, at least until we get DOMA stricken from the books, for gay couples. Some rules are in your favor and some are against you. It would be very good to see an attorney before DOMA is ruled on because some of the options will then go away. (the specific technique i am talking about is called a Grantor Retained Income Trust)
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