Buying a House as an Unmarried Couple

Should my partner and I buy a house together even though we're not married?

Purchasing a home with someone can be a rewarding experience, but life is full of surprises. Before entering a binding contract, it’s important to understand all the potential outcomes.

While it’s not the most romantic notion, ultimately, marriage is a legal agreement. So, what happens if you want to buy a house and skip the ring? Let’s discuss.

Whether you’re divorced and repartnered, you dream of a Golden Girls arrangement, or marriage just doesn’t align with your personal values, you’re in good company with the increasing number of unmarried property owners. The traditional rules of home ownership are shifting.

So why are people willing to commit to buying a home together but not marriage? Well, if you want to buy a home with your partner, you may be able to afford a larger mortgage. In the current Bend housing market, having that kind of buying power can mean the difference between purchasing your dream home and settling for a condo next to a noisy highway.

However, be aware that unmarried partners have some unique considerations that married couples don't have. The laws dealing with the distribution of property when a couple splits up or a partner dies are few and vague when the couple isn’t married.

So, it’s important for unmarried partners to have a detailed written cohabitation agreement and a plan for the property if either partner dies or if the relationship ends. This agreement should cover sections like buyout terms in the case of a breakup, an exit strategy if one partner wants to sell, and a dispute resolution process. Both partners should also keep thorough and accurate records of their individual contributions.

You and your partner can own the property in a few ways:

• Joint tenants with rights of survivorship — When one partner dies, the surviving partner automatically owns the entire property, bypassing the probate process. This way of owning property may make it more difficult to sell your share of the property without your partner's consent. However, it may also offer creditor protection because neither partner owns a separate share; instead, both own equal rights in the entire property.
• Tenants in common — You and your partner each can leave your portion of the property to whomever you choose in your wills. Creditors of tenants in common may have an easier time attaching the property than if it were owned jointly with rights of survivorship.
• Individually in one of your names — You and your partner may decide that only one of you will own the property. However, if you choose individual ownership, beware. The person named on the deed will be able to sell the property without the consent or even the knowledge of the other partner.
• In a trust — You can also choose to own the property in trust, with the trust agreement spelling out the rights and obligations of each partner. You'll want to get advice from an experienced attorney on all of the ownership options available to you and your partner.

Buying a home isn’t a one size fits all process. Your relationship dynamic is unique and your journey to homeownership doesn’t have to look like anyone else’s.

Financial decisions like this are complex enough as it is. So, if you’re contemplating a big purchase with your partner and are unsure how to proceed, take the time to talk with a trusted professional. If both you and your partner’s priorities align and you have a solid understanding of the possible outcomes, then come up with a plan and start house hunting. And if you hesitate over the potential risks, then listen to your gut and hold off until your circumstances change.

Part of our role as financial planners is to ask our clients the right questions so they can identify their true goals and priorities. We help our clients make smart financial decisions and tailor advice to their unique circumstances.

Send me a note at stu@bendwealth.com if you have a question for a future column, and if you’re looking for a financial team that you can rely on, let’s talk.

Stu Malakoff, CPFA, CDFA^®, CRPC^®, CFP^®

Founder, Bend Wealth Advisors

Certified Financial Planner™

D 541.306.4325 // stu@bendwealth.com // O 541.306.4324

Office: 523 NW Colorado Ave. Ste. 100 // Bend, OR 97703

Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Bend Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services.

Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Bend Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services. Any opinions are those of Stuart Malakoff and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. You should discuss any tax or legal matters with the appropriate professional.