How an Unmarried Couple Can Legally Split Real Property

According to the Pew Research Center, in 1960, approximately 59% of adults aged 18 to 29 years old were married. By 2010, this figure had dropped to 20%. Fewer adults are getting married, and the average age for first marriages has increased as well.

Unmarried cohabitation has increased, but many of the state laws governing shared property, and how such property is divided when a relationship fails, are still based upon marriage as being the line separating individual property from joint property. This raises some obvious questions for unmarried uncouples: What happens to jointly owned assets when an unmarried couple splits up?

Unmarried Couples Splitting Property

Splitting a home can raise serious questions if you’re unmarried, depending on whose name is on the title.

When it comes to protecting your legal interests in a home, there’s a right way and a wrong way to jointly purchase and own property. Unmarried couples who want to have a backup plan should purchase a home as either joint tenants, or tenants-in-common.

Joint tenants: Joint tenancy means that the parties who own a piece of property share equal ownership. In the case of a breakup, each individual retains their ownership interest. Another benefit of this option is that, if one of the owners dies, the other party or parties takes control of the decedent’s share.

Tenants-in-common: If you are in a situation where you anticipate that one half of the couple will pay significantly more of the mortgage than the other, then it may be best to own property as tenants-in-common. In this case, you jointly determine how large of a share each party owns. So, if one half of the couple is anticipated to pay two-thirds of the rent, then the couple can decide to give that party two-thirds ownership, with the other half getting one-third ownership. Something to keep in mind: by default, if one party dies, their share does not automatically go to the other party, as is the case with joint tenants. Instead, their share is part of their collective estate, and is distributed according to their living trust or will.

Either of these options helps to protect the rights and financial interests of the two halves of an unmarried couple if the relationship fails.

But far too often, only one person’s name appears on the property title.

In this case, the person named on the title is the sole owner of the home in question, regardless of how much money the other person paid towards the home. However, there are steps that an unnamed partner can take to correct this.

If a relationship fails in a tumultuous fashion, the legal owner of a home may not feel predisposed to ‘give’ their former partner their rightful share of the home. In this case, the best option is for the unnamed partner to bring an action to quiet title, along with any proof that there was a common intention between the couple to share ownership of the property. This proof may be in the form of a written agreement, or records of financial contributions to the down payment, mortgage, maintenance costs, and so on. If successful in proving this, it’s likely that you’ll be compensated financially, rather than with a portion of the ownership, which may lead to the house being sold.

If you are able to work with your ex-partner is a productive, amicable fashion, a nonjudicial settlement agreement is a great way to finding a fair and equitable way to split up real estate, cars, and other property. Such an agreement does not require the involvement of a court, eliminating the need to spend a lot of time in front of a judge and paying pricey lawyers, and creates a binding legal agreement that helps to protect both parties.

It can be very challenging for an unmarried couple to split real estate, as well as other costly assets—such as vehicles and financial investments—after the relationship has failed. If you are facing this predicament, Toeppen & Grevious can help. To learn more, give us a call at 916-400-4516, or send us a message using our contact form.