Week 8.1: Starting with the Attorney

Larry is someone I've known for years. Saturday we went to his office to talk about the whole range of things we needed to do: title for the house, financing the house, living wills, wills, and all that stuff. Our goal was to start getting things taken care of. When we left, we had a much longer to-do list.

Item #1 on the agenda: Real Property
Here's our situation: I own the row house we will be renovating. Juan Felipe owns the condo we will be living in while we renovate. After the renovation, the plan is for us to both own 50% of the renovated row house, and 0% of the condo.

We can register as domestic partners in the District and avoid the transfer and recordation tax if I give Juan Felipe half the house. If we do that, however, the federal gift tax hits us. If I sell him half the row house, we avoid the gift tax problem, but then we get the transfer and recordation tax.

Another catch - while married couples can pay their bills however they want - we can't. We have to be able to demonstrate to the IRS that we have equally contributed to the house in order to avoid having estate tax due on the whole house when the first of us dies. Unlike my father and his wife, who each pay different bills, we have to be able to demonstrate that everything was paid 50/50. That adds a new item to the to-do list: get a joint checking account and keep scrupulous records about money in and money out of it.

The easy thing would be to trade half an interest in the condo for half an interest in the row house, but Virginia's vindictive constitution prohibits any contractual arrangements that could confer any "benefits of marriage" to same-gender couples. We would get probably be pounded by taxes there. This from the state (although they insist on being called a "Commonwealth") that tenaciously held onto laws making it illegal for different races to intermarry. Virginia is for lovers, but only if you're straight, married, and white.

We also need to find out what the mortgage lender may require on the title, as that will affect what we need to do.


Item #2 on the agenda: Powers of Attorney, Living Wills, etc.
We need to make sure that if anything happens to one of us, the other can take care of things. This is especially important as Juan Felipe does not have any family nearby. Another thing on the to-do list: find alternates for medical and financial decision making in the event we are both incapacitated.


Item #3 on the agenda: Prenup
If people get married and it doesn't work out, there is a whole set of statutes and case law for what happens when a marriage ends. Not so for couples that cannot marry. To avoid costly, lengthy court cases, we will need to work this out ahead of time.

Item #4 on the agenda: Wills
Larry had an interesting take on this. I think we had both assumed that if we went down on a plane together that our families should get the money. He pointed out there is no reason that needs to be the case. Sure, it would be nice to provide for our nephew's college (and for any other nieces and nephews we may get), but why give it to them if they don't need it? Another thing for the to-do list: what should happen to our money when we die?


I have give really short shrift to all of these issues. Consult an attorney if you want to know the painful, intricate details.

Tuesday night Juan Felipe opened a joint checking account for us with Bank of America. Who knew you could do that over the internet? He put $25 in, so now I owe $25.