Legal Question in Real Estate Law in Illinois

I purchased a house in IL, Cook county a few years ago, and my name is the only one on the mortgage and title/deed. Two years ago I got married, but did not refinance. Now I want to use a quit claim deed to add my spouse on the title as tenants by entirety. My lender said it's OK to do so even if I remain the only one on the mortgage.

1. My spouse is a non-us citizen but legal resident. The house is valued at 180K, equity in the house about 60K. Do I need to file Form 709 with IRS ?

2. Do I lose my homestead exemption when I record the new deed? Do I need to re-apply for it ? My spouse does not own any other property and we live together for many years even before we got married.

3. Any Tax implications later after one of us dies?

Thanks.


Asked on 9/30/16, 9:28 am

1 Answer from Attorneys
Stephen Messutta

1. Gifts of present interests do not require a gift tax return. Hopefully you're working on her citizenship?

2. If you mean home owner exemption for property taxes, no, but it is not a bad idea to keep an eye on it and reapply because I've seen things fall through the cracks. As to the "homestead" in Illinois that's really almost meaningless - it's only $10,000 -- you can't exempt your whole house value. But by putting it in TBE you avoided the ability of a creditor to come after the home while you're both around, which is more important.

3. Maybe but this is way too soon to tell - first, tax laws could change a lot - and the marital exemption would have to fall away a lot for you to worry (currently $5+MM fed and $4+MM IL), very little to do with ownership if the deed was done properly, etc.

But here's the thing: you sound like someone who may be contemplating some kind of estate plan and more investments. Good time to start thinking of these things.

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Answered on 10/10/16, 1:53 pm


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