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So Who Gets the Home?
Last time, we gave the example of a man with children from a prior relationship who purchased a home with his girlfriend. And the key question we want to address is when he dies, who will receive his share of the home?
Since they were not formally married in this hypothetical, we can also assume they would not be considered common law spouses and, therefore, the house is not considered marital property. However, regardless of the marital status of the two people, if the home were titled in joint tenancy, then the home would go to the girlfriend because that is how joint tenancy operates: upon the passing of the first person, title automatically passes to the second person. However, if the home were not titled in joint tenancy, the girlfriend would continue to own her share after his death and, we can focus on what happens with his ownership interest.
Without a will, his share of the home will most likely go to his children so, at his passing, the girlfriend will own part of the home and his children will own the remainder. This scenario could play out smoothly or, more likely, could be problematic because she and his children are now co-owners of the home.
And, as if that problem is not daunting enough, there is another question that must be answered. Since this man and his girlfriend purchased the house together, how much do each of them own? And if his estate is passed to the children, how much of the value of the home is he actually passing on? Unless they each paid exactly half of every cost (including the mortgage, insurance, taxes, repairs, etc.), that will be difficult to answer and whatever the answer is, it may create its own fight.
As anyone that has experienced the death of a loved one can attest, it is difficult when death affects a family even under the best of circumstances. Without proper preparation, though, this example – and many others like it – make a difficult time that much worse. Different parties, each dealing with their own grief, have different understandings what the deceased would have wanted. Without a will, the law may impose a result none of them wanted or create conflicts where no one thought there would be.
By comparison, the planning solutions don’t have to be difficult. For example, by using a will to identify his wishes regarding what happens to the home, the questions we raised would be answered simply and effectively. Planning for your own passing is a wonderful thing to do for those left behind; to the contrary, failing to plan often leaves them in a worse position than anyone anticipated.
© 2018 Steven J Wright, Brad R Wright