Saturday, August 2, 2014

Same-Sex Couples and Title to Their Home

Recently the Kent County Michgan Recorder of Deed refused to record a deed of a same-sex couple married in another state.  The deed was to convey their home to themselves as tenants by the entirety (a legal entity allowed only for a married couple).

Because Michigan does not allow or recognize same-sex marriages, Kent County was correct in not allowing the deed to be recorded, as is dictated by current law in Michigan.

So what's the big deal?

Tenancy by the entirety exists only if persons are married at the time the deed is recorded.  Any subsequent marriage will not create a tenancy by the entirety, but will instead default to tenants-in-common.  This is a key distinction, as there are no rights of survivorship when the property is held as tenants-in-common (there is also not the asset protection from creditors available for the home afforded to one spouse under tenancy-by-the-entireties). 

So what is a same-sex couple to do if they want rights of survivorship upon the death of one spouse?  As discussed earlier, even if a county in Michigan did record their deed as tenants-by-the entireties, it may very well be voided by the court and the home ownership would default to tenants-in-common.  Instead, a same-sex couple can get "joint tenants with rights of survivorship" simply by recording the deed in that way.  They won't get the home protection from creditors of one spouse as they would under tenants-by-the-entireties, but at least the surviving spouse would have full ownership, passing outside of probate, upon the death of the other spouse.

As we can see the writing on the wall, same-sex marriage will eventually be allowed in Michigan, as the current Michigan constitutional prohibition against same-sex marriage will probably fall under the next constitutional challenge.  When that happens, any married couple can (and should) consider home ownership under tenants-by-the-entireties.