Question: My husband and I purchased our home in Phoenix 12 years ago as community property with right of survivorship. My husband recently died. The home has increased in value to $186,000, and I am worried about paying taxes. Should I have the title transferred to my name only? I am in my late 70s and I may want to sell in the near future.
Answer: At the time your husband died, you legally became the sole owner of your home as the surviving spouse. If you sell your home, a title company will require certain documentation such as the recording of your husband’s death certificate. Finally, any capital gain if you sell your home should be excluded from capital gains tax up to $250,000 as a single taxpayer. Because Arizona adopted “community property with right of survivorship” in the late 1990s, a husband and wife should normally take title as community property with right of survivorship. If the husband and wife do not want the surviving spouse to be the sole owner of the home (typically because of children from a prior marriage), the home probably should be owned as community property by designating in the deed as “Community Property” or as “Husband and Wife.” The couple then should provide by will or by beneficiary deed who will inherit their respective one-half community property interest in the home when they die. Alternatively, the husband and wife can take title in a family trust and provide for distributions of their home and other assets in this family trust.