Not Married And Buying A House Together?

Posted by Lorraine Ross on October 21, 2007

There are unique issues that must be considered when you and your partner are not married and buying a house together. As with most things in life, there are both advantages and disadvantages associated with unmarried partners making a major investment like of the purchase of a home together.

Being able to afford a bigger and better house is one benefit of pooling your resources with your partner. There is certainly a financial advantage to pooling your resources with your partner when buying a home. Two incomes definitely makes it easier to qualify for larger mortgage than one.

However, when not married and buying a house together, you have to plan ahead for the worst case scenario. The law is pretty clear when it comes to determining how property is split up in the event of divorce or the death of a spouse. This gets a little more fuzzy when it comes to unmarried partners.

It is necessary for those who are not married and buying a house together to have a legal agreement drawn up that clearly spells out what will happen with the property in the event of a break-up or the death of one of the partners.

You may not want to think about such things when undertaking purchasing a house, but this is the only way to protect yourself and your investment. It is also very important that each partner keep very clear records regarding who paid for what and when, in the event there is ever a question regarding settlement of an estate.

Most married couples purchase their homes as joint tenants with right of survivorship. For couples who are not married and buying a house together, this may not be the best option. With this type of ownership, in the event of the death of one person whose name is on the deed, the property becomes the sole property of the other person listed as a joint tenant with right of survivorship.

Sometimes unmarried partners who purchase a home together don’t necessarily want the home to go directly to the surviving partner. This is particularly common in events where one or both of the partners have children from a previous relationship. One option is to have your house deeded so that you are tenants in common.

If you and your partner are tenants in common, and one of the partners dies, that partner’s share of the property can be willed to an heir. While this allows the partners the opportunity to leave home equity to their heirs, it can be problematic for the surviving partner and the heir. As the surviving partner, you will be left sharing ownership of your home with someone you don’t even know.

You may have chosen to live with your partner, but you certainly might not want to live with his or her heir. The heir may be willing to sell the share to you, but you might not have the funds.

Test another option is to choose to own the property in trust. If you go with this option, you will need to work with an attorney who can help you create a practical and enforceable trust agreement. The purpose of the trust agreement is to specify the obligations of each partner and the rights of each partner.

No matter which option you think is more beneficial, you should verify your choice with an estate planning professional as well as an attorney. As you can see, there is much to think about and plan for when not married and buying a house together.