Q: My wife is planning to buy an rental property in VA. Me and my wife co own a primay home in MA
I have a question whether I should go on the title with her on the investment property or Is it better to stay off the title ? My intention is to protect our primary home and personal assest against any law suits we might face in the future on the rental property
A: A married couple buying an investment property in Virginia should consider several options for holding title. Most couples hold title to real property as tenants by the entirety with the common-law right of survivorship. The tenancy protects the property from the debts of either spouse alone, except the IRS, and provides for transfer upon the death of either to the other. From that tenancy, a couple might consider putting title into an LLC or a trust. The LLC provides protection from liabilty arising from claims against either spouse, which claims could include a tenant or guest on the property. Homeowners insurance also protects against such claims, but the policy will have limits on insurance coverage. Title in an LLC may complicate the availability of future financing secured by the property or insurance coverage. Trusts are used to avoid probate and provide for the management and disposition of the corpus of the trust. Of course, anyone contemplating the various forms of title should consult with a tax expert on the potential consequences of all the options.
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