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The Perils and Pitfalls of Owning Real Estate as an Unmarried Couple

It’s becoming more common for couples to live together before they get married, and some choose never to get married at all. Though it can be an exciting step to purchase property and move in together, many couples fail to recognize the legal ramifications of splitting up or one of them passing away. Though it’s not a fun thought for happy couples, it’s an important reality to face.

Even though unmarried people in a relationship may feel strongly united, the law still effectively treats them as separate individuals. While both partners may contribute to the mortgage and other household costs, if only one’s name is on the title that person legally owns the property.

Also, if one person passes away and there is no Last Will and Testament leaving the property to the other, the living individual isn’t likely to get anything. The real estate would go through Probate Court and, even though they may feel like they were the most important person in their partner’s life, the law will probably distribute the property among parents and other family members.

Even if it’s uncomfortable, couples need to talk and establish what they each want to happen if the relationship ends or one passes away. There are legally binding options for unmarried couples to ensure their investment is fairly protected.

Joint with Rights of Survivorship Vs. Tenants-in-Common

It is important that couples understand the difference between holding title as “Joint with Rights of Survivorship” and “Tenants in Common”.  Generally, both designations mean each owner has an “undivided” 50% ownership in the property.  However, the importance between these designations is keenly felt in the event of an owner’s death.  With a Survivorship title, the surviving owner receives the decedent’s share – even if the decedent had a Will stating otherwise or children from another marriage.  But, with only a Tenant-in-Common title, the decedent’s share becomes an estate asset and it is feasable that the surviving owner does not receive the decedent’s share.

Titles and Mortgages
Titles and mortgages can be tricky for unmarried couples as well. One individual may purchase the property on their credit, but then later add a significant other to the title. Then the couple splits up. The second person is uncooperative and won’t pay the bills, but still legally owns the property which prohibits the first person from selling. So then the first person can’t make their payments which hurts their credit and financial standing.

An individual may also run into trouble if their name is not on the title, even if they get married to that person later on. If there is no Will and the first spouse dies, the one without his or her name on the title may not automatically inherit the property.  It’s a simple process to add a spouse’s name to a title, and the best option for individuals who want to make sure their spouse will own the home in the event of a death.

When it comes to property, the most critical element for any unmarried or married couple is to have Wills listing out exactly what they want to happen with their property if one passes away.

For help with wills or other property ownership agreements (or any other questions), contact me today to set up a time to chat.

Please be advised that Christina M. Hronek is licensed to practice in the State of Ohio only and the information provided in this article is based upon Ohio law. This article is for informational purposes only and does not constitute legal advice.

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