Page 26 - Southern Exposure - December '23

Page 26, Southern Exposure

eLder estate pLanninG

Beware Of Unequal Contributions

When Purchasing A House

Submitted by Anné Desormier-Cartwright, Esq.

At a time of record home For most people, a home is their greatest investment and For those who already own a house, how the property
unaffordability, more people the primary driver of household wealth. Even if somebody is titled is no less important to their estate plan.
are teaming up with friends co-owns a house, their investment in the property is likely Circumstances change. The original title terms may no
and relatives to realize the to dwarf their other accounts and property. longer reflect a person’s current priorities. While changing
home ownership dream. Deciding what to do with shares of a jointly-owned property a joint tenancy may not always be possible or practical,
According to the National is a major estate planning consideration. And it begins at the at the very least, a person should know how a home title
Association of Realtors time a property is purchased and the title is issued. affects their property rights, the rights of any heirs, and
(NAR), more than 75 percent When co-buying a house, each owner should understand tax obligations.
of homes on the market how it is being titled and make sure the titling matches their Get Your Estate Planning House In Order
now are too expensive for estate planning wishes. For example, joint tenancy might Choosing how to title a co-owned home, and how this
middle-income buyers. Just make sense for a married couple but be a poor choice for choice fits into your estate plan, depends on the people and
five years ago, this same friends or unmarried partners because they give up the right property involved, your estate planning goals, and state
income group could afford half of all available homes. From to leave the property to anyone other than the co-owner. laws where the property is located. An estate planning
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2010 to 2020, the number of homes bought by people with In the latter case, tenancy in common is likely a better attorney from our office can explain the pros, cons, and
different last names soared by more than 770 percent. This option. Each tenant in common has the power to dispose consequences of each type of joint ownership to help you
group includes friends, roommates, and married couples. In of their property interest however they choose – but only decide which one best fits your situation.
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2021, the percentage of single-family homes purchased by if they indicate their wishes in their estate plan. Otherwise,
nonmarried co-buyers was 25 percent, up from 17.4 percent their share of the property passes according to state law Elder Estate Planning on page 27
in 2018. Purchasing a property with other people can help when they die.
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a buyer to lower their individual costs while building equity.
However, going in on a house together can also create trouble “Service is our number one priority”
spots, including survivorship and inheritance issues.
A home is the largest single investment that most people 561-743-0070
make. When buying a home with another person, the co-
owners must decide how to hold the title so that it aligns with www.palmspoolservices.com
their wealth-building and estate planning goals.
Co-Ownership And Home Titles
Co-buying a home with a partner, relative, or friend can
reduce the costs of the down payment, mortgage payments,
utilities, and other household expenses for each buyer, while
allowing them to build home equity. Some co-buyers may
not even want to live in the home. Their goal may be to rent
it out or flip it for a profit.
Home co-ownership can present problems as well. If one
buyer has a bad credit score, it can negatively affect another
buyer’s mortgage terms. And if one party cannot meet their
financial obligations, the other party could be on the hook
for the budget shortfall.
Typically, co-owners are not only listed together on the Expires 1/15/24.
mortgage loan, but on the home title. Having more than one
person on the title raises estate planning issues that may not
immediately arise but should be thought about. State Licensed & Insured
Property can be titled in different ways. Common ways Serving Palm Beach County CPC # 1457468 • LPG#30099
of joint ownership titling include tenants in common, joint
tenants with right of survivorship, and tenants by the entirety.
• Tenants in common. With this type of title, property
shares may or may not be divided equally between owners.
Each owner’s share might be equal to their investment in
the property or the shares may be divided equally among the
owners. However, the co-owners still have equal rights to use
all areas of the property. They can also choose who receives
their interest when they die; it does not automatically pass
to the other owner(s).
• Joint tenants with right of survivorship. Under this Upscale Resale
arrangement, each owner has an undivided interest in the
property. They own the property in equal shares and have Experience The Difference
the right to use the property however they wish. The right of
survivorship means that, when one of the joint owners dies, New and consigned furniture, unique lighting, accessories and gifts.
their property interest passes to the surviving joint owner(s). Complete wallpaper and fabric library for all your design needs.
• Tenancy by the entirety. This title option works the same
way as joint tenants with right of survivorship but is only
available to married couples in certain states. It also provides
valuable creditor protection because property owned in this
way is not subject to the creditors of just one spouse (although
it may be subject to the claims of a creditor of both spouses).
In states with community property, another type of joint
ownership for married couples, co-owned property can be
titled with the right of survivorship, but it is not the default
and must be designated this way.
Joint Ownership And Estate Planning
Around 60 percent of Americans do not have a will, Call us to sell. See us to buy.
but the percentage without an estate plan is highest among Over 32,000 sq. ft. in 2 locations to serve you!
Millennials (78 percent) and lower among Baby Boomers (58
percent). About two-thirds of Gen Xers do not have a will, PALM BEACH GARDENS: New Location
while more than 80 percent of those age 72 or older do have 7700 N Military Trail • 561.694.0964
a will. 4
One of the top reasons cited for failing to address estate WELLINGTON: Wellington Marketplace
planning is a lack of assets to leave to anyone. While this is 13857 Wellington Trace • 561.798.5222
often a myth – estate planning is advisable no matter how
many assets a person has – buying a house instantly changes myconsignanddesign.com Nanci Smith, CEO
this calculus.