When two married people own real estate together, how do their rights work? Here, we walk though the most basic questions about couples and their homes.
How Do Married Couples Share Home Ownership?
Spouses own a home in one of three ways:
- As a tenancy by the entirety,
- A joint tenancy with survivorship rights, or
- A tenancy in common.
The first two of those include rights of survivorship. This means that after one spouse passes away, the living spouse records an affidavit of survivorship along with the late spouse’s death certificate, and then becomes the sole owner on the title. Here are the unique traits of each type of vesting:
Tenancy by the entirety
The tenancy by the entirety is available only to married people. The two spouses receive the entire ownership interest and rights together, through a single deed. What’s special about the tenancy by the entirety—and why do many couples want to qualify for it before purchasing a home? Married people get important protections through a tenancy by the entirety:
- Both spouses must agree, and sign the deed, to convey the real estate to someone else.
- Creditors are stopped from going after one spouse’s debts by placing a lien on the marital home. So, the spouse without the debt is protected from creditors.
Do a search for your state’s real estate law to find out if a tenancy by the entirety is available to you.
Joint tenancy with the right of survivorship
If the deed names the spouses as joint tenants with the right of survivorship, they own their property in equal shares. As with the tenancy in common, there’s no need for a will or probate, because after one spouse dies the surviving spouse automatically takes ownership. But here, one spouse can sign the deed away, convey their share, and thereby change the joint tenancy into a tenancy in common.
So let’s talk about the tenancy in common.
Tenancy in common
Not everyone wants to put property into probate deliberately. But maybe you do—say, because you have a grown child from a previous marriage, and intend to pass the home to that child.
What works? The tenancy in common. If your title is vested this way, then you can leave your half-interest to your child. But be sure your spouse and your adult child, who might one day share ownership, can agree on what they’d like to do with their interests when that day comes.
Note that tenants in common need not hold equal shares. You may designate each co-owner’s percentage on the title.
Now, We’re Getting Divorced. What Are My Property Rights?
At divorce, a tenancy by the entirety is severed if you had one. The two owners change into tenants in common. As for the disposition of the marital home, this will be worked out through the divorce process. If there are children, a court will always work to make their best interests the guiding factor.
It’s likely that the divorce court that follows the equitable distribution principle—as most states do—would give the home to the one who’s still in it if the other spouse voluntarily moved out. The one who leaves might then receive monetary compensation for their interest in the real estate, depending on the many facts and circumstances the court must consider.
Divorce Is Done. I’m Ordered to Convey My Interest in the Home to my Ex. What Deed Will I Use?
The quitclaim deed will release your property interest, citing the divorce decree and leaving the property to your ex. (The deed, which you both sign, must show that you’re quitclaiming the whole property, and not just a half interest.)
Note these important points:
- Divorcing partners must use their state-specific quitclaim and divorce lien forms. (With a divorce lien, you keep your claim to your equity in the home.)
- In some states, a deed without warranty, not a quitclaim, is customary.
- A quitclaim does not release you from the mortgage liability. Ask your family lawyer if an indemnity clause in your divorce agreement shields either spouse from the debt obligations of the other.
Divorce is never pleasant, and it can be expensive. But it’s a mediated method to separate co-owned property and allow your lives to proceed.
I’m Getting Married Again. Can I Add My New Spouse to My Title?
If you bought your home before a marriage, you have options—again, depending on what your state laws allow. You can just leave the title as it is and direct it to pass through probate to the person named in your will when you pass away.
Your state might, alternatively, allow single homeowners to convey homes into tenancies by the entirety after marriage. If you should decide to transfer sole title and create rights of survivorship, take care to transfer a 100% interest to you both—not just 50%.
Know that if you bring someone else onto your title, that can’t be undone without your new co-owner’s consent. Your new co-owner gets the same rights you have. The only way to change that is by a court order.
Should I Have a Prenup (or a Postnup)?
Some couples, especially those who don’t want the arrangements made for them by state law, have pre- or postnuptial agreements.
The general rule is what the parties had before the marriage are separate property assets. (Have them appraised.) Gifts made directly to you, including inheritances, are also your separate property. (Document them.) Unless you plan to leave everything to your spouse, keep your separate assets from turning into marital property.
- Keep a bank account in your name only and don’t co-mingle your assets (and income from your assets) in joint accounts.
- Don’t pay tax or other debts on your own property from a joint account.
- Be sure to check your state’s marital property rights statute for specific rules.
It’s prudent to protect your assets from risks inherent in relationships as allowed by state law. For a valid agreement, both partners should have their own lawyer’s guidance. Unmarried homeowners too can prepare, by having a no-nuptial say what happens to the couple’s assets in the event that the relationship sours.
I Live in a Community Property State. So, I Can’t Keep Separate Property?
If you live in a community property state, your earnings (and what you spend them on) are equally owned, together. And you’re both responsible for loans taken out during your marriage.
To vest a home as community property, you must be married. You each hold an equal interest in your home, which you may transfer or leave in your will. The spouses may make a community property agreement to avoid probate, if allowed by state law. Or the law might allow for community property with survivorship rights, making probate unnecessary.
You could still own separate property. For example:
- A home you inherited alone is yours alone.
- Using a will, a pre- or postnup, or another valid, written agreement, the couple can make some or all community property into separate property. A family lawyer in your state can advise you.
Arizona, Texas, California, Idaho, New Mexico, Louisiana, Nevada, Washington, and Wisconsin all follow community property rules. In some states, spouses can designate at least some assets as community property through special trusts. In South Dakota, property placed in a special spousal trust is deemed community property. Alaska has a similar provision. A Tennessee community property trust is also available for real estate, and offers special tax advantages.
I Read That Tenancies by the Entirety Are for a Husband and Wife. Are Same-Sex Partners Included?
Once the federal definitions of marriage partners are changed to become gender-neutral, legal terminology will become more inclusive of same-sex couples. Already, practices are changing.
Before the Supreme Court decided Obergefell v. Hodges in 2015, same-sex couples could choose between the tenancy in common and the joint tenancy with a right of survivorship. They still can. But if they decide to marry, the option now exists to hold property as tenants by the entirety as well.
Marriage Isn’t Necessary for Home Co-Ownership
You are in the best position to assess the strength of your relationship. It’s up to you to decide whether to buy a home as married partners. However you choose to go forward, speak with a respected real estate professional and make sure the deed to the property is correctly written.
Denny Müller https://unsplash.com/photos/PTInh1bi4ik