Q: My husband died six years ago. For the last year and a half, I have been living with a new partner. He is divorced. For a whole variety of reasons, we do not want to get married. Both of us have grown children from our previous marriages, and at this point in our lives do not want to tangle our finances together. We do want to buy a new house, actually a condo, so we can downsize and eliminate some house maintenance and otherwise simplify our lives. Since we are unmarried, what are some considerations we should think about if we buy a home together?
A: Unmarried couples buying real estate together should draw up a written agreement governing the arrangement to avoid any possible disagreements or potential conflicts down the road.
If just one of you will own the new home, the agreement should specify if the other will contribute to the mortgage (if there is one) and how much, as well as other home-related expenses, such as taxes, utilities, maintenance, repairs, etc. The agreement should also spell out what rights the non-owner has to continue living in the home if the owner dies or enters a nursing home. The agreement should also specify that the non-owner has no rights to the home if he/she and the owner partner split. You should think about various scenarios and what you want to happen with the home, and put it into the agreement. Involving your children or heirs in this planning is also important.
If you and your partner buy the home together, you should also draw up a cohabitation agreement that outlines how much each will contribute toward buying the home, and how much each will contribute toward taxes, and other expenses of owning and maintaining the home. The agreement should address what will happen to real estate you and your partner already own separately, what will happen to the new home if you break up, or if one partner dies or becomes incapacitated. The agreement should discuss these scenarios. Do you want to leave certain household items, heirlooms, etc. to your children? What about the property itself? Will a surviving partner have the right to buy the property and contents from the estate of the deceased? Will it be sold? Where will the proceeds go?
Each of you might want to hire your own lawyer to draw up the agreement. Involving your children is also important. You don’t want any of your children to challenge the terms of the agreement at some later date. If any of the children refuse to become involved, getting a written statement to this effect might be prudent. Drawing up an agreement and getting things in writing ahead of time can avoid any miscommunication or misunderstandings or worse yet, possible conflicts later on.
Linda Goodspeed is a longtime real estate writer and author of “In and Out of Darkness.” Email her at [email protected]