Unmarried Couples and Property - Basics
Key Takeaways
- Unmarried couples can jointly buy property as joint tenants or as tenants-in-common.
- Cohabitating couples should have a cohabitation agreement if they own shared property or assets.
- A will or trust can provide for your partner as a beneficiary if you pass away.
- Unmarried Couples and Property: Buying Property Together
- Ways To Buy a Property for Unmarried Couples
- Unmarried Couples and Property: Breaking Up
- Unmarried Couples and Property: Death
- Shared Bank Accounts for Unmarried Couples
- Common Law Marriage for Unmarried Couples
- Legal Help To Protect Your Property Rights
More couples live together before they marry, and many live together indefinitely without ever getting married. Generally, couples accumulate shared property over their relationship. However, unmarried partners may not think about how to divide property if the relationship ends. Property laws generally treat cohabitating couples as separate individuals, no matter how long the relationship lasts.
Property and real estate laws vary by state. Here are some things unmarried couples should keep in mind regarding their property. For more information about protecting your property rights without getting married, talk to a local family law attorney for legal advice.
Unmarried Couples and Property: Buying Property Together
Homeownership is a big decision for unmarried and married couples. For most people, buying a home or condo is the biggest purchase of their life. Make sure you’re on the same page before buying a house together. Buying property together gives you both a property interest and property owner liabilities.
Discuss who will pay what amount to the down payment and how you will split the mortgage payments. Home buyers may need to find a lender that will offer a home loan for you and your partner. A co-ownership agreement can protect your legal rights if you need to sell the property or split up.
Ways To Buy a Property for Unmarried Couples
Before you buy a house with someone who isn’t your spouse, decide how you’ll own the property. This can protect your rights if your partner dies or the relationship ends. For real property purchases, you can determine whether you’ll own the property as joint tenants or tenants-in-common.
Joint tenancy is a form of ownership in which you share ownership equally. All joint tenants own equal interests in the jointly owned property. When two or more persons own property as joint tenants and one homeowner dies, the remaining owner takes over the deceased person’s share. This is the right of survivorship.
If you hold the property as tenants-in-common, each owner has a distinct share in the property. You decide the percentage of the share. For example, if one party contributes 25% to the purchase price, the property share could reflect that percentage. Unlike joint tenancy, if the co-owner dies, you don’t have rights to their share of the property. Their share becomes part of their estate. The person’s will or state laws determine how to distribute the property.
Unmarried Couples and Property: Breaking Up
If you purchase a house jointly with both names (either as joint tenants or as tenants-in-common), dividing up the property is more complex. Both buyers’ names are still on the loan. Here are some options for splitting co-owned property after a breakup:
- Refinance the mortgage or loan in one party’s name only. This would require the person who refinances to have good enough credit to qualify for a new loan.
- Sell the home and pay off the loan or split the proceeds.
- One person keeps the home and makes the payments until the loan is paid off. This arrangement requires the person who walks away from the property to be comfortable staying on the loan until it ends.
- Let the bank repossess the home. This option negatively affects both parties’ credit scores.
Mediation is an option for a former couple who can’t reach an agreement on their own. A local family law attorney can help you with these legal issues.
If the property is in the sole name of one party, it remains that person’s property upon separation. Without a contract or legal agreement, it’s hard to show both partners intend to share the property. Proving a common intention is difficult—unless there’s proof both parties contributed to the purchase price, loan payments, and maintenance.
Unmarried Couples and Property: Death
Unmarried couples should also consider what they want to happen upon each of their deaths. It’s another essential property matter. Without a will or living trust, the deceased partner’s estate will pass according to the probate laws of their state. Intestate succession is the method of distributing a person’s property when they haven’t provided it for distribution in a will.
Generally, property is distributed to the deceased person’s spouse and children. If the person is not married, the property can go to parents, siblings, aunts and uncles, nieces and nephews, and then to more distant relatives. The decedent’s partner will receive nothing under intestate laws. That’s why it is vital for couples living together to develop wills or other estate planning documents that express their desires.
A will allows someone to do the following:
- Name beneficiaries of property
- Forgive debts owed
- Name guardians of minor children
- Create trusts
- Name an executor of the will
- Disinherit relatives
Developing a will or trust is an effective way to protect your partner if you should die.
If you want to leave your property to your partner, you need to write a will or other legal document to designate your partner as a beneficiary. If you have a life insurance policy, you need to specify your surviving partner as the beneficiary.
Shared Bank Accounts for Unmarried Couples
Unmarried couples can open a joint bank account. A joint account gives each partner access to the account to deposit and withdraw money. However, couples should make sure they communicate about personal finances before pooling their money together. You may want a written agreement to provide for what happens to the bank account if the couple separates.
Common Law Marriage for Unmarried Couples
Under common law marriage, some couples may be considered married even if it was never formalized. The couple usually has to live together for a number of years and represent themselves as married. However, only a few states still have common-law marriages. If you really want to protect your property rights, you can get married or make a cohabitation agreement or contract.
Legal Help To Protect Your Property Rights
The best way to protect your property rights for shared assets and property is a written agreement. A contract will spell out your rights and responsibilities. A cohabitation agreement will also provide information about what happens if you split up or need to sell the property. While these financial decisions are challenging for some couples, they are essential if you’re buying a house together. Consult with an experienced family law attorney to talk about owning and managing property with your significant other.
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