Top 10 Reasons Unmarried Partners Should Own Property as Joint Tenants

Purchasing a home is a common rite of passage for married couples, or at least it's a financial goal. But unmarried partners, perhaps concerned about the long-term risks of a 30-year mortgage, typically stick to the rental market. After all, rentals are easy to walk away from since there's no equity to be recovered at the end of a lease period.

Below, FindLaw shares 10 benefits of unmarried partners owning property as joint tenants.

10. It's Simple

Joint tenancy is easy to achieve. Joint tenancy is a straightforward way for domestic partners to own property together. You can do this by including a clause referring to that form of ownership in the title to the property. When you buy a home together, both your names are on the deed as co-owners. This gives each partner with legal rights to the property. It's always recommended to get legal advice to understand any potential legal issues.

9. Shows Commitment

Purchasing real estate together is a big step that shows commitment to one another. It's a decision that should involve serious discussions and a clear understanding of each other's finances.

8. Financial Security

Becoming joint tenants, or homeowners in general, usually makes more long-term financial sense than paying rent year after year. Homeownership is an investment that can provide financial security for both partners and even partially fund your retirement. As joint tenants, both partners can tap into the equity in the home in case you need money in the future. This can be especially important in the event of a breakup.

7. Tax Benefits

Homeownership can provide significant tax benefits to the couple. These benefits can be more complicated when the couple is unmarried. A married couple that owns a home can take the mortgage and property tax deductions on their joint tax return.

An unmarried couple cannot file a joint return and will have to figure out how to divide those tax benefits. If it makes more economic sense for one party to claim the deductions, the other should be compensated in some other way, such as by being responsible for fewer household expenses.

6. Prevents Gift Taxes

If only one member of an unmarried couple owns the home and he or she lets the other party live there rent-free, the IRS may consider that arrangement a gift to the nonpaying partner. If that gift is worth more than $10,000 a year, or the equivalent of about $833 rent per month, the giver-or the homeowner-will have to pay gift taxes. You can avoid this tax complication if the homeowner charges the other partner rent and keeps accurate books and records.

5. Shared Asset

In a joint tenancy, the property is a shared asset. This means any increase in the property's value belongs to both partners equally. Equal ownership of assets can create a balance of power in the relationship. It's like a joint bank account but for your house!

4. Shared Debt

As joint tenants, you are most likely also joint debtors. If both partners are named on the mortgage note, neither is saddled alone with the corresponding debt, and they both share equally in this financial burden. This is important to consider when talking with your lender.

3. Proof of Ownership

If the relationship does not last, each party has sound legal proof of their entitlement to an equal share of the property. In a joint tenancy, each partner's name is on the title. This provides clear proof of ownership and can help prevent misunderstandings or disputes over who owns what.

2. Prevents Financial Hardship

In the case of a breakup, having a legal document that outlines ownership can prevent financial hardship. It can provide a clear path for the sale of the property, ensuring each partner gets their fair share.

1. Right of Survivorship

When a property is titled as joint tenants with right of survivorship (this type of ownership must be specified on the deed or the joint owners will likely be considered tenants in common), when one joint tenant dies, the title to the property automatically passes to the other without the need to go through the formal probate process.

If only one member of an unmarried couple holds title to the property and does not have a will granting the property to the other party, it would pass to the deceased's legal heirs (usually family members), despite any contrary intentions on the part of the couple. With property held by deed as a joint tenancy with the right of survivorship, the surviving partner automatically inherits the other's share of the property. This can offer significant protection and peace of mind.

Have More Questions About Owning Property as Unmarried Partners? Contact an Attorney

Joint tenancy has benefits for unmarried partners, but there are important factors to consider before making this decision. Learn more about joint tenancy and whether it would work for you by speaking with an attorney.

It's crucial to get legal advice to ensure you fully understand your rights and responsibilities. Lawyers can help homebuyers with estate planning or a cohabitation property agreement. They can help with any written agreement with your significant other.

Speak with a qualified family law attorney in your area today.