Many unmarried couples
living together may decide to invest in a home, co-op, condominium or a timeshare.
It can be a ingenious
idea and beneficial to enter a joint property ownership, but only if they go in
with their eyes wide open and have legal safeguards in place. Here's a
breakdown of the pros, cons, and smart strategies:
Potential Benefits
- Shared Investment
- Buying property together can build equity and financial stability for
both partners.
- Right of Survivorship
- If held as joint tenants, the surviving partner automatically
inherits the other’s share, avoiding probate.
- Commitment Without Marriage
- For couples not ready or willing to marry, joint ownership can reflect a
serious commitment.
Risks to Watch Out For
- No Automatic Legal Protections
- Unlike married couples, unmarried partners don’t get default legal
rights if the relationship ends, or one partner dies.
- Unequal Contributions
- If one partner pays more toward the down payment or mortgage, disputes
can arise without clear documentation.
- Breakups Get Messy - If the relationship ends, dividing the property can be complicated and may require a partition suit, which is a legal process forcing sale or division.
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| Photo by Kindel Media |
Smart Legal Safeguards
- Cohabitation Agreement
- This contract outlines who owns what, how expenses are split, and what
happens if you break up. Courts usually uphold these if they’re fair and
properly executed.
- Title Structure:
Decide whether to hold the property as joint tenants (equal shares,
right of survivorship) or tenants-in-common (customizable shares,
no automatic inheritance).
- Estate Planning:
A will or trust can ensure your partner inherits your share if you pass
away.
Joint ownership can work wonderfully
for unmarried couples, but only with clear communication, legal planning, and a
shared understanding of the financial and emotional stakes. If you're
considering it, talking to a real estate attorney or financial advisor is a
wise move.
If you would like help
drafting a sample cohabitation agreement or exploring title options, visit the two
sites below:
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