How Couples Can Title Real Estate Property
When you buy a real estate property with another person, there are numerous ways in which to title that property.
It’s important to know that if you record the deed in one name only, that person is the legal owner. If you’re not on the deed, that one person on the deed has full legal power regarding the property - even if you contributed to the mortgage payments and/or maintenance. They own the property - you don’t.
Many times couples or domestic partners will put only one name on the recorded deed. The 'upside' to sole ownership is primarily to save on taxes (if one person has a high salary, the other a low salary) or one person has terrible credit or has creditors who may put a lien on the property, since judgments can't attach to a property if the person's name with the judgment against them is not on the title.
The downside to this ‘sole ownership’ is that person could sell the property and pocket all the profits or if they should die, the property could go to a third party. Contact an attorney to discuss the pros and cons of sole ownership versus joint ownership.
If you want your name added, an experienced real estate attorney may be able to add the second partner’s name to the title. The attorney can discuss any consequences that may arise by adding an owner to the title. Our attorneys at Gantenbein Law firm are fully qualified real estate attorneys who can offer other options to protect the interests of both parties, and our skilled tax attorneys can offer options regarding the tax consequences of joint tenancy.
When you have property titled as ‘joint tenants’, both parties have equal ownership of the property. If one dies, the remaining partner will automatically become the sole owner, even if there is a will stating otherwise. This transfer is under the right of survivorship. Upon the death of one joint tenant, the property will not have to go through the expense of probate proceedings.
Tenants in common have no rights when one partner dies. The property will go to whomever is specified in a will or living trust. If there is no will or trust, the deceased person’s heirs will inherit their share. Tenants in common can have unequal shares in the property. One could be 30% and the other 70% and these percentages should be written in a legal agreement or contract.
If you and the other person are considering marriage, title and taxation issues are very different if you’re married. Changing marital status after you buy a home can bring on complex tax and ownership issues. It’s best to make those decisions before you purchase a property.
Should you add your partner's name to the title of your real estate? It depends. There are both pros and cons to
If you are interested in discussing whether joint title is for you, call 303-618-2122 to schedule a consult.