Ask Leslie: Unmarried couple wants to purchase a home. What’s next?

DEAR LESLIE,

What advice would you give an unmarried couple who would like to purchase a house together?

– Full house…

Dear Full House…,

Buying a house with the person you love is an exciting and wonderful experience. It can be both emotionally and financially satisfying.

However, if you are unmarried, there are several things you will want to consider. Should you separate or should one party pre-decease the other, while both of these are not pleasant thoughts, it is something that needs to be considered before you sign on the dotted line.

How will you take title to the property? For example, will you own the home equally 50-50, and if so, will you title the home as Joint Tenants with Right of Survivorship (JTWRS) or as Tenants in Common? A joint tenant (JTWRS) automatically gets the other person’s share of the property upon death – and neither partner can their share of the property away to someone else.
Should the party’s split up, then as equal owners, each would walk away with their respective share upon sale.
As a Tenant in Common, each homeowner gets to leave their respective share in the property/home to someone other than their partner, which could create huge problems for the surviving partner. Imagine you own a place as a tenant in common with a person you love, and you are unmarried. That person dies leaving their share of the property to a stranger or one of their family members; you just became co-owners with someone else, and it could be someone you don’t even know or like. This scenario can present all kinds of problems. Should your partner insist on holding the title as Tenants in Common (a red flag to be discussed in another article), then you need to establish the right to a Life Estate for the survivor should the worst occur. A life estate gives the surviving homeowner the right to remain in the home uninterrupted for the remainder of their life. At the surviving partner’s death, the home should be sold by the Estate of the deceased partner, and the new surviving owner and the profit, if any, will then be divided. A good Trust & Estate Lawyer and Real Estate lawyer could be beneficial with this type of property ownership.