Plenty of laws help protect married couples when they split up and divide their property. No such legal sympathy exists for those who are unmarried and do the same.
Yet according to a widely quoted Coldwell Banker study from1 in 4 unwed millennial couples had bought property together. The reasons were and are clear: Low-rate mortgages, rising rents, and the ability to deduct mortgage interest and property taxes from income taxes all make being a homeowner an attractive option.
So unmarried couples will keep purchasing homes together, and then, sadly, many of them will fall out of love. To mitigate the financial pain of breaking up, here are some issues they should Am i entitled to half the house if not married before they buy.
Owning a home means coming up with a down payment and closing costs, covering property taxes and utilities, and paying repair and maintenance bills. Rarely can those financial responsibilities be split One person may have the savings for a heftier deposit.
One may earn a higher regular salary and find it easier to make mortgage payments. One may be saddled with student debt or a low credit score. One may be skilled with tools and ready to do repairs around the house, raising the issue of whether in-kind contributions have a monetary value and what that value should be. Certainly, one person can hold the title alone.
Of course, the couple can still buy furniture together, decorate together and call the place home together. Two or more people can take title to a house as tenants in common. A widowed man who has two adult children buys a house with his new girlfriend as tenants in common.
They each contribute half of all expenses, including the down payment. His new girlfriend still owns her half of the house, but she may not be able to continue living there unless an agreement can be reached with his kids. They may want her to start paying them rent. Or they might be eager to get their whole inheritance by selling the house.
A tenant in common can bring a lawsuit to force a property sale if the other co-owners are unwilling to sell. The court can order the property sold, with the proceeds split among the co-owners according to their ownership shares.
Joint tenancy is a popular way to hold title among married couples. Unmarried couples may or may not be willing to pass that big an asset on to the other person. What happens to the house in case of a breakup? Address the issue of buying each other out and how to resolve the matter if both of you want the house.
You may want a contract to automatically give one of you the first right to buy out the other at fair market value within 90 days. Or you may opt for a coin toss to decide who gets to buy out the other. Yup, that can be legal if you agree to it.
What if one partner wants to break up, move out and let somebody else live in the house in their place? What if one partner wants to break up, not move out and bring somebody else to live in the house with them? And if the one who stayed actually misses payments, the one who left is still responsible.
Decide who pays any refinancing costs. Perhaps then, you agree that the house will be sold to a third party within a fixed period of time.
Spell it all out. Then we ran their situations by an estate planning lawyer for some general advice. Last year, when their out-of-state landlord wanted to sell the Chicago condo they were renting, they raised their hands to buy it.
They have an understanding that Chung will repay her the difference and that they will be equal partners in ownership.
Did they get a legal document drawn up laying out the terms of ownership, as her mother suggested? We trust each other, so we figured, what the heck?
They opened a joint checking account and each of them deposits an equal amount a month to cover their living expenses. For a few years now, Chung, who gets health insurance through his job, has covered Fjellman as a domestic partner. What would happen if one of them received a job offer elsewhere or wanted to move out for whatever reason?
Three years ago, they decided to move in together. They sold their respective houses and paid cash for a 1,square-foot condo in Marina del Ray, California. They continue to keep their finances separate. They have one joint checking account from which all household expenses, including property taxes and the homeowners association bills, are covered.
Lees and Schwimmer went to a lawyer to help them set up their ownership terms and were transparent with their children to avoid potential conflict down the road. They own the condo in a life estate, which means that when one of them dies, the other can live in the condo until that person dies or moves. When they are both gone from the condo, the ownership reverts to their respective trusts. At that point, their heirs can sell it.
Although both their spouses have died, Lees said they have no plans to Am i entitled to half the house if not married each other. Purchases made by later-in-life unwed couples can present especially complicated issues, said Murphy, who advised Lees and Schwimmer.
Their financial affairs may differ significantly. Plus, "Am i entitled to half the house if not married" can be adult children, minor children, grandchildren and sometimes elderly parents to be considered. Without a legal document, there are no rights or rules to protect them if they split, she said. They can also address what happens to property acquired during the period of unwedded bliss.