Buying a home together is a major commitment, whether you and your partner are married or not. However, since unmarried couples don’t have the same legal protections that married couples have, the way that a deed is written can determine who owns what, what happens if the couple eventually breaks up and even inheritance rights should one partner die.
With more than 20 million unmarried couples cohabitating in the United States, this issue has become increasingly important. Before you and your partner take the title to a property, talk carefully about your expected contributions, ownership interest and what should happen if one of you dies. Your answers will inform your choices. Let’s look at a couple of options.
Joint tenancy with right of survivorship
Joint tenancy with right of survivorship (JTROS) generally gives both partners equal ownership of the home. If one partner dies, that person’s interest passes directly to the surviving owner, so the home doesn’t have to go through probate.
This arrangement may be useful if you want your partner to receive the entire home after your death. However, the deed must specifically state that you are joint tenants. Simply putting both of your names down on the deed won’t generally establish a joint tenancy.
Joint tenancy may not be appropriate if you and your partner contribute different amounts to the property’s purchase or maintenance or you want your share to pass to your children or another beneficiary. The survivorship provision generally controls the inheritance even if your will states differently.
Tenancy in common
Tenancy in common gives each party separate ownership interests. Those interests can be equal (50-50) or divided in another proportion to reflect each person’s financial contributions to the property.
If either of you should die while you own the home, your share of the property won’t automatically pass to you surviving partner. Instead, it becomes part of your estate. Ownership will pass according to your will or Delaware’s intestacy laws.
This option may offer more flexibility, particularly if you and your partner have children from other relationships or keep your finances entirely separated. However, it also means that either of you could eventually share ownership of the property with the other’s adult children, parents or other heirs, should one of you die. This makes coordinated estate planning especially important.
The deed to the property needs to be titled properly, but it isn’t the only issue unmarried couples should discuss. Without an agreement about the down payment, mortgage, taxes, insurance, repairs and what will happen if the relationship ends, you could be setting yourself up for trouble. Working with an experienced attorney can prevent a lot of future confusion and conflicts.