The Issues With Joint Debt (part 2)

Joint Property

Buying property together can be a great investment, but there are situations that will arise that you need to prepare for ahead of time. While it is not pleasant to consider what will happen to your property if your partner or spouse dies, it is important that you understand what actually would happen should this happen. Many couples push this issue to the backburner because they simply do not think it would happen to them. As tedious as this may sound, all aspects must be though out carefully when you buy property with someone else.

When two people buy property together, the deed can be written in several different ways. Laws do vary from state to state about property held by two or more people, and especially the property of a legally married couple. In many states, in the event of the death of a husband or a wife, the surviving spouse automatically becomes owner of that property that they bough together as long as they did it after they were married.

Other factors can effect what you would prefer to happen if one person should die. Maybe one of you has added complications, like children from a previous relationship or marriage. If you are not legally married, maybe even two sisters buying a house together or some other sort of domestic partnership, state law may treat you differently from the way they would if you were legally married. So, be certain that you are completely aware of your standing in the exact state you have joint property and are aware of the specifics of the law regarding all possible situations. Be sure to also find out whether either of you may sell your share without the other’s permission - and find out how the courts would view your joint property in the event of an untimely death.

Common language on the deed of common property jointly owned by unmarried partners is joint tenancy with right of survivorship. In the event of one of the partner’s death, the asset is automatically turned over to the survivor, who becomes the sole owner. Any financial obligation remains, however: the surviving partner will need to cover the expenses of the entire mortgage. So, while the property is turned over to the survivor, that person also becomes responsible for the mortgage. This is definitely an area where there are many things to consider and you should really be aware of the exact stand you have in all cases of owning joint property.

Commonly asked question: When a couple purchases property together, what is the very best way for the deed to be written? This completely depends on which U.S. state the property is purchased in. You should understand that there are states where the property owned by married couples automatically is turned over to the surviving spouse should the other pass away. You really have to decide what action fits your specific situation and always seek legal advice by asking all the detailed questions you want answers to.

There are also other forms of ownership that may not be as common, but they exist and you should know about them. Theses forms of ownership also vary from state to state (always remember to be aware of the specific state laws where you buy property with someone else – never assume). If you are making a major purchase like a home would be considered to be, be certain that you find out about the specific state laws in order to learn your exact options. Yeah, yeah, we keep saying this, but it is one of the most overlooked issues couples and partnerships make when purchasing joint property. Know about all of the key words you will find in your deed and seek  competent help from a professional if you have any questions, doubts or issues.

Here are some common terms used in deeds that you will want to understand completely:

-         Tenancy in entirety means almost the same as joint tenancy, but the couple must be legally married and neither person can sell without the other’s consent.

-         Community property. In several (but certainly not all states), all property that is purchased after the couple gets married is owned equally by each spouse.

-         Tenancy in common permits you to select who you want to inherit your share of the joint property you have purchased should you pass on.

The above terms are commonly used, but in rare instances you may find other terminology, this is why it is always a good ides to seek a professional’s help such as a real estate attorney.

Be sure to continue on to the next section of this multi sectioned debt free article that covers different aspects of joint property. After all, there is a lot more to it than we have covered on this page.

Part 3…

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