Not Legally Married, But Willing to Buy

So, you and your honey have been together a while, maybe even living together, but you’re not married. Now you’re thinking of buying a home together. Can you? Should you? What are the ramifications of doing that?

This is a topic near and dear to my heart, as my partner and I cannot legally get married here in Georgia. This doesn’t just apply to same-sex couples, however. There are many couples that either choose not to get married, or are unable to do so for other reasons.

There are variables I can’t speak to, such as whether you and yours are emotionally ready to make such a large financial commitment. That one you’ll have to figure out on your own. But I can speak to the more practical aspects of your potential home purchase.

When my partner and I decided to buy a house together, we each owned our own homes. Although we could easily have sold one of them and moved into the other, we decided to start fresh with a home that was “neutral territory.” Having two homes to sell can be daunting, but we ended up selling one fast, then moving into the other while we renovated our new home. This provided leeway in terms of time and money.

Not being legally married creates a different set of issues in buying a house together. Most importantly, I highly recommend having a co-investment agreement drawn up by an attorney. (And an attorney who is familiar with such.) These typically detail not only the terms of your investments and ownership of the home, but how things will be handled should your partnership be dissolved for whatever reason. And, yes, it is a lot like a pre-nup, if that’s what you are thinking.

No one likes to think about these things, but without the protection that civil marriage affords, this is something that can’t be ignored. What if one partner wants to buy the other one out? What if you both want to sell? Who decides the value? All of these things and more would be incorporated into an investment agreement.

Of course, you’ll have to decide how you’re going to split the costs. In a perfect world, partners would put up equal down payments, and then split all future costs equally, including renovations, maintenance and mortgage payments. This is not always possible or practical. So, keep accurate records of what was paid by whom on an ongoing basis.

Another issue to consider at the outset, and which your closing attorney will discuss with you, is how to take title to the home. Here in Georgia there are two ways you can take title: As Tenants in Common, or as Joint Tenants With Rights of Survivorship. In the former, you and your partner would each own half of the home, and one partner could sell their half to a third party, or even will it to someone else upon their death. In the latter, you own the entire home jointly, and if one partner dies, the ownership is automatically transferred to the surviving party, without the necessity of spelling that out in a will.

Most of my clients in this situation have opted to hold title as Joint Tenants With Rights of Survivorship. This is much more protective of your interest in the property, and avoids any possibility of someone challenging a will. And that can mean better protection for your partner, too.

There are other things to consider as well, such as tax deductions. Your accountant can provide you with good insight into those questions. (And, again, I would urge you to use an accountant who is familiar with such scenarios.) We did find that it made sense for us to use the same accountant, as he was able to best advise us on the individual and collective financial pictures. It’s also a good idea, even if you keep your money separate otherwise, to open a joint bank account, which makes it much easier to track joint household expenses.

All of this may seem a bit overwhelming, but it is simpler than it sounds. Get the legal-financial logistics in order – including having all of your questions answered by the appropriate professionals – so you can go out and find the house of your (shared) dreams.