Joint tenancy, partnership agreements and wills aren’t usually buzzwords for straight couples starting a life together.
But they are for same-sex couples who, unless seven Connecticut gay and lesbian couples who filed a lawsuit on Aug. 25 for the right to wed get their way, need to think about the legal ramifications of buying a home together.
The seven couples filed the lawsuit in New Haven Superior Court last week after trying and failing to obtain marriage licenses in Madison. The couples have been in relationships ranging from 10 to 28 years, according to a release from the Gay & Lesbian Advocates & Defenders, which is aiding in the lawsuit. Many of the couples are raising children and dealing with illness – one member of a couple has breast cancer.
And although Connecticut does have ways for unmarried couples who own property to get nearly the same rights as married couples, there is more work involved to assure those rights and not every couple is informed of the steps they should take.
“Typically what happens is people don’t bother doing this stuff,” said Eugene Marconi, general counsel for the Connecticut Association of Realtors.
Marconi said unmarried couples should consider certain agreements when buying a home together that would protect them in case they split up or one of them dies. One of the provisions that could help them is joint tenancy.
If two unmarried people buy a home together without specifying joint tenancy on the deed, they are considered tenants in common, Marconi said. That means if one of the homeowners dies, the surviving half of the couple would not necessarily have any right to the deceased’s half of the property. But if the couple specifies that they have joint tenancy, the deceased’s half of the property automatically goes to the surviving partner.
If a couple is married, they don’t need to specify joint tenancy. The surviving partner would automatically inherit the half of the property.
That also could be done with a will, Marconi said. But if a member of an unmarried couple dies without a will, that person’s property likely would go to a blood relative, he said.
Unmarried couples also should consider what could happen if their relationship goes sour.
“One difference is in the remedy if there’s a disagreement,” Marconi said.
When a married couple gets divorced, the courts have jurisdiction to determine ownership of property. That’s not the case for unmarried couples.
“They have remedies, but the remedies can be cumbersome,” Marconi said.
‘A Bone of Contention’
If an unmarried couple splits, a court would have jurisdiction in that instance, as well. But instead of deciding which member of the couple gets property, the court could appoint a committee to take partition action and auction off the property, Marconi said. The auction is similar to a foreclosure auction and, many times, doesn’t command the price that a sale on the private market would command. The court would then decide how to split the profit.
But by specifying joint tenancy or coming up with an agreement on how the property would be split if the couple breaks up, unmarried couples can govern to whom the property will go.
“The biggest difference between married and unmarried people is the expectation of the dissolution of the marriage,” said Gregory J. Cava, an attorney with Zeldes Needle & Cooper in Bridgeport and chairman of the Connecticut Bar Association’s Real Property Executive Committee. “Anytime you have a couple that’s not married, the real problem is not during the relationship [but after].”
Married and unmarried couples are on relatively the same footing in this area. If a married couple divorces and doesn’t have a prenuptial agreement, the courts have broad jurisdiction to decide who gets the property. If an unmarried couple has joint tenancy and doesn’t split costs 50/50, it can be a little more complicated, Cava said.
But unmarried couples can sign their own version of a prenuptial agreement. Marconi advises unmarried couples to decide what will happen to their property if they break up.
“Have some sort of written agreement concerning property,” he said.
If the couple has a partnership agreement, the partners actually may have more power over the fate of their property than a married couple going to court.
“They can sort of set their own rules,” Marconi said. “You’re left by what your contract rights are.”
Another difference in the rights of unmarried and married couples who own property together is their tax deductions, Marconi said. Married couples can file a joint return and have their property taxes and interest deducted on that return. But unmarried people have to file separately and decide who should get the deduction.
“That could be a bone of contention,” Marconi said.
All of the possible stumbling blocks to owning a home as an unmarried couple can be addressed early in the buying process if the couple spends 15 minutes with an attorney to learn of the tools at their disposal, Marconi said.
But two people buying a home often overlook those issues, Cava said.
“They frequently do overlook it,” he said. “That’s not usually something two people sharing a house together want to think about.”