A Must Read For All Unmarried Couples Before Buying Property Together

More couples than ever are living together before they are married, or deciding to forego marriage all together.  It is extremely common for unmarried couples to buy real estate together.  One of the most important questions that unmarried couples overlook when buying property together, is: What will happen to the property after they die?

UNMARRIED COUPLES, PROPERTY, AND DEATH

The most important document at any purchase is the deed.  The deed is a legal document transferring ownership of the property from the Seller(s) to the Buyer(s).  On the deed an unmarried couple buying a home may be labeled “tenants in common” or “joint tenants.”  How the couple is labeled on the deed will have profound consequences should one of them pass away.  For this reason, Buyers should fully consider and discuss with each other what they would like to happen to their share in the property in the event that they should pass way.

Tenants in common

If the couple is labeled as “tenants in common” on the deed, then if one of them should pass then their percentage ownership will go to either:

• The beneficiary named in their will or
• If they do not have a will, the probate court will determine who the property will go to.  The probate judge has little discretion to whom the property will go.  This is because the State Legislature has enacted what’s called an intestacy statute.  This statute determines who will receive your property if you die without a will.  Not surprisingly, the property will go to any blood relatives prior to any non relatives.  If the person is unmarried, the property will be divided among parents, siblings, aunts and uncles, nieces and nephews, and then to more distant relatives. The decedent's partner will most likely receive nothing.

Whenever a tenant in common dies there will be expensive court costs to determine in Probate Court who gets their share of the property.  Also, it will be very difficult for the surviving owner to sell or refinance the property until the Probate Court decides who owns the deceased’s share of the property.

For these reasons, unmarried home buyers wanting their share of the property to pass to their significant other, should be joint tenants.

Joint tenants

If the couple is listed as “joint tenants” on the deed, then if one of them should pass then the property automatically becomes owned 100% by the survivor.  There is no need to probate a will.  Accordingly, attorney fees may be reduced or eliminated.  The property may be immediately sold or refinanced by the survivor.

The best advice to any unmarried couple buying property together is to let your partner and family clearly know what you want to happen to your share of the property should you die.  Doing so will provide you with peace of mind and allow you and your partner to make fully informed decisions.