First comes love. Then comes marriage… or a civil union or cohabitation. From there, we’re cheering for something along the lines of “and they lived happily ever after.” But because life is full of plot twists—and because divorce rates are around 40 to 50 percent in the United States—it can be important to take some precautions when you’re buying a house with a partner.
Who better to offer that advice than divorce attorneys? Here, they share some of their best real estate advice for couples looking to buy a home together:
Have a written agreement in place when you buy together
Multiple divorce attorneys mentioned that, before you close on a home, you and your partner should have a written agreement in place.
For unmarried couples, it’s best to sit down with an attorney to create a cohabitation agreement, which is something like a home-buying prenup, explains Mary E. Ramos, divorce and family law attorney at Ramos Law Group in Houston, Texas. “It protects everyone’s interests in the event of a split,” she says. Detail things like percentages of property ownership, a dispute resolution process, and buyout terms, she explains.
A cohabitation agreement could even delve into who is responsible for paying utility bills and for major household repairs.
For married couples, having a written agreement in place can make the divorce process less messy and easier for the court to decide how to divide up your property, Ramos explains.
New York attorney Heather A. Fig also recommends keeping records and paperwork that show how payment for the house was divided between parties.
Make sure your name is on the title
In most divorce cases, it’s not a big deal if one party’s name is not on the title—property purchased during marriage is presumed to be marital property and is divided if a divorce occurs, explains attorney Kimberly A. Reklau with Walny Legal Group in Wisconsin. But there are some circumstances where this could matter. For example, if the home was purchased by a spouse with non-marital funds (this could be a gift or inheritance) and is only titled in that spouse’s name, they could make the case that the other spouse has no interest in the property. This can be avoided by making sure both spouses’ names are on the title.
Titles can vary depending on location, but unmarried couples need to make sure they’re getting a title that’s best fit for their situation. For example, a sole ownership title is just what it sounds like: Only one person’s name is on the deed. Other titles can split up ownership 50-50, or allow for unequal ownership, like 60-40.
Couples should both be monitoring the mortgage account
Truth test: When’s the last time you and your partner sat down, opened up an account statement, and paid the bill together? It’s relationship physics that one partner ends up being responsible for paying the bills, including the mortgage payment, while the other spouse pays little attention. But this can cause problems, especially if one spouse is, say, taking out a second mortgage or a home equity line of credit and doing so in a sneaky manner, says Reklau. Yikes, right? When a divorce occurs, the other partner is shocked to realize there’s far less equity than expected.
“This could be a very rude awakening for the uninformed spouse who thought he or she was entitled to a certain amount of funds out of the residence,” Reklau says.
Remember, you’re both responsible for mortgage debt
As long as the mortgage is in the name of both spouses, they are financially responsible for the debt—even if one party is no longer living in the home, explains attorney David Reischer, CEO of LegalAdvice.com. Because of this, both spouses should agree to keep the mortgage in good standing. Not doing so can damage credit histories in the event of a divorce.
Sell your house after a divorce
After a split, it’s a good idea to sell your home if you can, says attorney Christopher S. Hildebrand with Hildebrand Law in Arizona. There’s the emotional component: “It’s better to start that new life without the constant reminders that are present when you continue to live in the same home you shared with your spouse,” he says.
But this is also practical advice, especially if there were debts that need to be paid. Even though a judge may order your spouse to pay certain debts, you can’t guarantee he or she will actually do so. If there are debts, try to reach an agreement to use the proceeds from the sale of your home to pay them off. That way, you don’t have to worry about being sued for a debt your ex is responsible for, Hildebrand explains, and you can rest assured it won’t ding your credit history.
Is it romantic to have these financial discussions prior to buying a home? Nope. But it is definitely smart—think of it as proof that you and your partner can navigate uncomfortable conversations with confidence.