Author Topic: Unmarried SOs buying a house together. How to hold title etc.  (Read 3964 times)

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #50 on: February 17, 2021, 09:19:08 AM »
The right of the survivor to stay in the house doesn't necessarily have to be for life. It should be possible to have a trust written up so the survivor has the right to stay in the home for a number of years before the heirs could force a sale, with the survivor retaining the right of first refusal. This could balance the need for the survivor to have time to grieve, adjust, and make arrangements to buy out the heirs if desired against the heirs' desires to have use of their inheritance sooner rather than later. I'd want to ensure that the expiration of this situation would not fall on the anniversary of the death or another important anniversary, so I might have the period expressed as ending on the first day of the tenth calendar quarter following the death rather than two years.

This is what I suggested above. That something like a 2 year period be put in place, but also that the heirs never actually co-own the house, just that the house has to be sold within that timeline and the heirs are entitled to half of whatever profits are made from the sale when it happens.

If neither partner actually wants to end up co-owning the house with heirs, then why ever have the heirs inherit the physical house? That way you're never stuck fighting with heirs over any of the sale process. If you think updating the bathrooms before listing would be a good idea, you don't need to have all of the co-owners agree first.

It's at the very least worth looking into if indefinite renting isn't ideal.
Yeah renting forever isn't ideal at all and I imagine at some point relatively soon we will end up buying and than will have to wade thru the morass of legal crap to set something up.

The original pre-pandemic plan was for me to sell (which I did early last year and would have done anyways) and move in with him and we'd do some longer term travelling using his house as a home base. And then... well... that was it ;-)! Hadn't really thought beyond that. That's worked great this past year despite covid putting a damper on some plans but now he wants to sell too. So have to make decisions.

For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?

 

Cassie

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #51 on: February 17, 2021, 09:34:57 AM »
I think this idea makes the most sense and has the most protection. Now you just have to agree where to move:)).

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #52 on: February 17, 2021, 09:44:15 AM »
I think this idea makes the most sense and has the most protection. Now you just have to agree where to move:)).
Hopefully that will be the easy part! Just googling median home prices in different areas and WOW! You just dont realize how expensive this area (Orange County) is compared to other places. Median is something close to $800k. Other areas that I think are nice are closer to $200k or under.

Malcat

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #53 on: February 17, 2021, 09:46:40 AM »
The right of the survivor to stay in the house doesn't necessarily have to be for life. It should be possible to have a trust written up so the survivor has the right to stay in the home for a number of years before the heirs could force a sale, with the survivor retaining the right of first refusal. This could balance the need for the survivor to have time to grieve, adjust, and make arrangements to buy out the heirs if desired against the heirs' desires to have use of their inheritance sooner rather than later. I'd want to ensure that the expiration of this situation would not fall on the anniversary of the death or another important anniversary, so I might have the period expressed as ending on the first day of the tenth calendar quarter following the death rather than two years.

This is what I suggested above. That something like a 2 year period be put in place, but also that the heirs never actually co-own the house, just that the house has to be sold within that timeline and the heirs are entitled to half of whatever profits are made from the sale when it happens.

If neither partner actually wants to end up co-owning the house with heirs, then why ever have the heirs inherit the physical house? That way you're never stuck fighting with heirs over any of the sale process. If you think updating the bathrooms before listing would be a good idea, you don't need to have all of the co-owners agree first.

It's at the very least worth looking into if indefinite renting isn't ideal.
Yeah renting forever isn't ideal at all and I imagine at some point relatively soon we will end up buying and than will have to wade thru the morass of legal crap to set something up.

The original pre-pandemic plan was for me to sell (which I did early last year and would have done anyways) and move in with him and we'd do some longer term travelling using his house as a home base. And then... well... that was it ;-)! Hadn't really thought beyond that. That's worked great this past year despite covid putting a damper on some plans but now he wants to sell too. So have to make decisions.

For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?

Really, really, really smart thinking.

I was actually wondering why you were staying somewhere so high cost that this was an issue, but assumed there was a personal reason for it, so I didn't ask.

If relocating is at all on the table, then yeah, that's exactly what I would do in your situation.

Cassie

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #54 on: February 17, 2021, 09:52:24 AM »
A lot of Californians are moving to Northern Nevada which is increasing prices although itís cheap compared to by you. Property taxes are stupid cheap here.

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #55 on: February 17, 2021, 09:15:15 PM »
@Cassie We had looked at theTahoe area - well I did but can drag him along as he is an avid skier/boarder. But still expensive so will look out of state mostly.

To answer @Malcat  question - we both have familiy, friends and activities here so stayed around mostly for that reason. Since our individual homes were paid off it was inexpensive for both of us.  But since neither of us particularly love it here (and in my case I don't really even like it here) and are both are no longer working we figure moving to a LCOL area and doing longer visits in winter would work well.

It does free up a lot of money for each of us to use as we want - or leave to heirs or a charity if we die - as well as provides housing security long term for both of us without either of us having to deal with the other persons crazy ass heirs ( I'm binge reading the inheritance drama thread and WOW!!). It would be nice if we could find a small place for around $200k - $300k total to split. Much better then the gazillion dollars price tag in much of Calif for a small house.
« Last Edit: February 17, 2021, 09:19:54 PM by spartana »

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #56 on: February 18, 2021, 01:15:44 AM »
I like the way your thinking has evolved over the course of this thread so far.

Warning: Insomnia fueled, somewhat related rambling ahead. Feel free to ignore.

Is your SO likely to inherit anything from his parents? If so, he could earmark those funds for his siblings. Another idea for him explore is to buy a cheap term life insurance policy naming the sibs as the beneficiaries. You could also buy insurance and designate your sister as sole beneficiary.

I have followed that Inheritance thread from the beginning and have my own stories to tell since my parents died. I was single for most of my adult life and planned on leaving the bulk of my estate to my siblings. I also have no children of my own.

Oh boy, once I went through the process of settling my parent's estate as co-executor, I totally changed my mind. I have five siblings. One of them stole from my parents and then frittered away her (reduced by her own larceny) inheritance. Do I want to let her do that with my hard-earned money? NO! Do I want to cut her out completely and leave my surviving siblings to deal with her bullshit at not getting her "fair" share? Do direct her portion to her kids? Will my other siblings even need the money by the time I croak? I have another sister who has weird (to me) ideas about investments and money management. Therefore, despite earning far more than I ever did, they have less. Do I want to give my hard earned money to their causes? Hell, no. OTOH, what do I care? I'll be dead. Finally, five is a big divisor. Whatever amount of money I have left, dividing by five makes the remainder comparatively small.

When we wed, DH and I made each other our beneficiaries of our assets and that's about as far as we got in our planning.  Last week, I discovered that one account still has two of my sibs as beneficiaries. I need to change that. I mentioned it to DH and it sparked an interesting conversation. He asked me if he thought any of my siblings were planning to leave any part of their estates to the other siblings (including me). I don't know for sure, but I'm pretty inclined to think they have not. As I am the oldest, my default is to want to "take care" of them. Maybe that's a paradigm I need to shift. Leaving them money won't make them think any better of me when I'm gone, nor will my remaining estate, once divided, be enough to materially improve their lives.

It's a lot to think about.

Imma

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #57 on: February 18, 2021, 02:54:44 AM »

When we wed, DH and I made each other our beneficiaries of our assets and that's about as far as we got in our planning.  Last week, I discovered that one account still has two of my sibs as beneficiaries. I need to change that. I mentioned it to DH and it sparked an interesting conversation. He asked me if he thought any of my siblings were planning to leave any part of their estates to the other siblings (including me). I don't know for sure, but I'm pretty inclined to think they have not. As I am the oldest, my default is to want to "take care" of them. Maybe that's a paradigm I need to shift. Leaving them money won't make them think any better of me when I'm gone, nor will my remaining estate, once divided, be enough to materially improve their lives.

It's a lot to think about.

That's a very good question. We also don't have children and neither do our siblings. I'm not sure, we're not close enough to ask these kind of questions, but I would be etremely surprised if any of them are leaving anything to us in their wills. For one of them I'm almost certain that they didn't. They are our heirs because that's what you're supposed to do, and we're not sure who else to leave our estate to. We could name friends as heirs, but where we live that means they would be very heavily taxed, unlike blood relatives.

I've thought about leaving everything to charity but honestly, I've seen that happen, and I haven't heard any positive stories about it at all. It seems that most charities have their own estate services that clear out your house, toss everything that's not a valuable antique and refuse to give any personal belongings to the family. And I'd feel rude asking my family to empty my house and only give them the photo albums and grandma's teapot and not give them any money.

UnleashHell

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #58 on: February 18, 2021, 04:28:04 AM »


For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?
I think that's excellent.
I have to as its almost exactly what we have done except we took out a joint mortgage on the property. We have each set up life insurance/ funds to cover our share of the mortgage to go to the other party - as does the house. that effectively means that the vast majority of our net worth would still go to each of our heirs if anything was to happen with the house going to our partner and no debt (or covered by other funds).

Good luck!

Malcat

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #59 on: February 18, 2021, 04:40:09 AM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #60 on: February 18, 2021, 06:14:42 AM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

It is in my family, but we used to be farmers. Childless siblings have always left their estates to their siblings. When you got married you were gifted a small piece of land by your family. The money you earned with that first piece of land would be used to buy more land to expand your farm. But since it started with a family gift of land, your whole farm 'morally' belongs to the family. So if you don't have kids, you leave it to your siblings so their kids can have the land. Unmarried parents stayed with their parents and would not buy out the other siblings, but on the unwritten condition that they had to leave everything to their siblings. If you did it any other way it would have been a scandal.

No one in my family still farms, but the tradition remains. I have several childless aunts and uncles. I'm the black sheep of the family so I don't expect to inherit anything, but my siblings are already talking about the inheritance they are expecting. They would be shocked if they wouldn't be the heirs.

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #61 on: February 18, 2021, 11:13:14 AM »


For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?
I think that's excellent.
I have to as its almost exactly what we have done except we took out a joint mortgage on the property. We have each set up life insurance/ funds to cover our share of the mortgage to go to the other party - as does the house. that effectively means that the vast majority of our net worth would still go to each of our heirs if anything was to happen with the house going to our partner and no debt (or covered by other funds).

Good luck!
I thought it was a good solution too. My sister and her BF will likely do the same in a couple of years. I personally would love to give a large part of my house sale money to a charity and my sister now, and once I purchase a new place I might do that.  But Also need to be practical for the future since its very important to me to be self-sufficient. Since I will likely only need a quarter Or less of my house sale money for my share of a new place, I will probably give my sister some now and the rest can go to charity when I die.

As for the BF, he has 5 siblings and lots of nieces and nephews so his assets will be divided between them. Anything he gets from parents (divorced working class people) will also be divided amongst the 6 siblings.

ETA: It's very highly likely that whoever survives longest will leave 1/2 of the shared house to the deceased persons heirs in their will. But wouldn't legally have to.
« Last Edit: February 18, 2021, 11:19:01 AM by spartana »

UnleashHell

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #62 on: February 18, 2021, 12:25:43 PM »


For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?
I think that's excellent.
I have to as its almost exactly what we have done except we took out a joint mortgage on the property. We have each set up life insurance/ funds to cover our share of the mortgage to go to the other party - as does the house. that effectively means that the vast majority of our net worth would still go to each of our heirs if anything was to happen with the house going to our partner and no debt (or covered by other funds).

Good luck!
I thought it was a good solution too. My sister and her BF will likely do the same in a couple of years. I personally would love to give a large part of my house sale money to a charity and my sister now, and once I purchase a new place I might do that.  But Also need to be practical for the future since its very important to me to be self-sufficient. Since I will likely only need a quarter Or less of my house sale money for my share of a new place, I will probably give my sister some now and the rest can go to charity when I die.

As for the BF, he has 5 siblings and lots of nieces and nephews so his assets will be divided between them. Anything he gets from parents (divorced working class people) will also be divided amongst the 6 siblings.

ETA: It's very highly likely that whoever survives longest will leave 1/2 of the shared house to the deceased persons heirs in their will. But wouldn't legally have to.

yeah - with the sums that each of us have outside of the house then leaving 1/2 the house to the other person just isn't significant - less so if insurance is picking up the slack.
the house value is less than 20% of my net- my kids would still get 80% of my net if I died - they'll be just fine. In addition its not funds that they should be planning on or relying on.
anyway - its good to have a solution at hand in advance of proceeding!

martyconlonontherun

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #63 on: February 18, 2021, 12:30:34 PM »
I sold my house in Calif to move in with BF and now he is selling his place and we will be buying a new place together in a different location. No plans to marry (both previously married and no kids), will keep finances separate and split all expenses 50/50 including cash house purchase (no mortgage). We are both "old" people (40s and 50s) and long term FIREees.

My question is how should we hold the title to a place. We would each like to have our share of the property go to our individual family members rather then to each other if one of us should die. We have wills that state that now but not sure if we would need the deed and/or a trust set up for that and how that would work. If one SO dies and the other wants to continue living in the house does he or she have the right to buy out the heir? Would the heir be allowed to sell or rent out their share (50%) of the house or force a sale to get their inheritance? Seems very convoluted.

The only other option I can see is just have one person buy the place and have it in their name 100% while the other just lives there as a "roomie" with no financial entitlement to the house. Any other suggestions?
I think the smartest and simplest answer is your last paragraph except have a lease agreement. Make it as even as possible where the rent/buy analysis is as even as possible so if you split or die, there is no hard feelings that you paid too much or little in rent. One gets the equity and the other gets below market rent. No fight about who keeps the house. No confusing legal issues. Do the splitting the pie scenario: One person cuts and the other chooses if they want the buy or rent slice.

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #64 on: February 18, 2021, 12:35:17 PM »
The right of the survivor to stay in the house doesn't necessarily have to be for life. It should be possible to have a trust written up so the survivor has the right to stay in the home for a number of years before the heirs could force a sale, with the survivor retaining the right of first refusal. This could balance the need for the survivor to have time to grieve, adjust, and make arrangements to buy out the heirs if desired against the heirs' desires to have use of their inheritance sooner rather than later. I'd want to ensure that the expiration of this situation would not fall on the anniversary of the death or another important anniversary, so I might have the period expressed as ending on the first day of the tenth calendar quarter following the death rather than two years.

This is what I suggested above. That something like a 2 year period be put in place, but also that the heirs never actually co-own the house, just that the house has to be sold within that timeline and the heirs are entitled to half of whatever profits are made from the sale when it happens.

If neither partner actually wants to end up co-owning the house with heirs, then why ever have the heirs inherit the physical house? That way you're never stuck fighting with heirs over any of the sale process. If you think updating the bathrooms before listing would be a good idea, you don't need to have all of the co-owners agree first.

It's at the very least worth looking into if indefinite renting isn't ideal.
Yeah renting forever isn't ideal at all and I imagine at some point relatively soon we will end up buying and than will have to wade thru the morass of legal crap to set something up.

The original pre-pandemic plan was for me to sell (which I did early last year and would have done anyways) and move in with him and we'd do some longer term travelling using his house as a home base. And then... well... that was it ;-)! Hadn't really thought beyond that. That's worked great this past year despite covid putting a damper on some plans but now he wants to sell too. So have to make decisions.

For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?

Sounds like a good plan to move out of the place you don't like and move to a (cheap) place for your hobby. That is what we are looking for as well.

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #65 on: February 18, 2021, 04:34:30 PM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

It's common to leave things to your closest living relatives, yes. Your state will have "intestacy" laws that make this explicit for people who die without wills. Here in Washington if you're married when you die your spouse will get all the community property. Otherwise your kids (or grandkids if your kids predeceased you) are next in line to split the pot. Your parents are next in line, then your siblings, then more distant relatives (grandparents, aunts, uncles, cousins). In this sense everyone has a will, it's just that if you don't bother to write it down they go with the default imposed by the state. If you don't want stuff going to your siblings, make sure to write that down.

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #66 on: February 18, 2021, 06:10:35 PM »
I think it sounds like you should hold it in a trust that outlines all this stuff. Otherwise it will very likely go to the next step according to CA law and could possibly go into probate.

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #67 on: February 18, 2021, 06:21:46 PM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

It's common to leave things to your closest living relatives, yes. Your state will have "intestacy" laws that make this explicit for people who die without wills. Here in Washington if you're married when you die your spouse will get all the community property. Otherwise your kids (or grandkids if your kids predeceased you) are next in line to split the pot. Your parents are next in line, then your siblings, then more distant relatives (grandparents, aunts, uncles, cousins). In this sense everyone has a will, it's just that if you don't bother to write it down they go with the default imposed by the state. If you don't want stuff going to your siblings, make sure to write that down.

Yes, I have a will because I know what happens otherwise. I just didn't know it was *expected*, as no one in my family on either side has ever done this, DH's either. Some kid-free folks have left money to nieces/nephews, but never to siblings. I've just personally never seen it.

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #68 on: February 18, 2021, 06:21:59 PM »
I think it sounds like you should hold it in a trust that outlines all this stuff. Otherwise it will very likely go to the next step according to CA law and could possibly go into probate.
I may be wrong, and someone correct if so, but I think if you hold title to a house as JTWROS even if unmarried the house by passes probate and automatically transfers to the joint owner. I do have my sister as primary beneficiary (with a charity as secondary if she dead) listed as the beneficiary on all my other financial assets including a small pension. I think all that by passes probate too. When I owned my house as sole owner I had a "transfer on death" deed recorded to leave it to her which I believe by passes probate too.
« Last Edit: February 18, 2021, 06:23:57 PM by spartana »

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #69 on: February 18, 2021, 07:07:29 PM »
I think it sounds like you should hold it in a trust that outlines all this stuff. Otherwise it will very likely go to the next step according to CA law and could possibly go into probate.
I may be wrong, and someone correct if so, but I think if you hold title to a house as JTWROS even if unmarried the house by passes probate and automatically transfers to the joint owner. I do have my sister as primary beneficiary (with a charity as secondary if she dead) listed as the beneficiary on all my other financial assets including a small pension. I think all that by passes probate too. When I owned my house as sole owner I had a "transfer on death" deed recorded to leave it to her which I believe by passes probate too.

That's my understanding as well.

Things bypass the probate process in those ways, meaning that the executor doesn't have to go through the court process to get things distributed.  All that needs to happen - usually - is that the recipient provides a death certificate and then the asset passes to them.

Note that even though the assets bypass the probate process, they still usually are assets of your estate.  This primarily has to do with estate and inheritance taxes, so the values of those assets would be included for calculating those taxes.

...

Not that we generally like Californians up here, but if you and your BF want to visit Boise, I'm still down for that glass of water. ;-)

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #70 on: February 19, 2021, 03:27:56 PM »
Things bypass the probate process in those ways, meaning that the executor doesn't have to go through the court process to get things distributed.  All that needs to happen - usually - is that the recipient provides a death certificate and then the asset passes to them.

Note that even though the assets bypass the probate process, they still usually are assets of your estate.  This primarily has to do with estate and inheritance taxes, so the values of those assets would be included for calculating those taxes.
My understanding is that assets that pass in a way that always avoids probate are not technically part of the estate and thus not under the legal control of the executor at all. If in a truss, then they are under the control of the trustee (basically financial accounts with named beneficiaries act as a trust with the financial institution acting as trustee).  Transfer on death deeds legally transfer the property immediately on death; the transfer merely needs to be recorded; there would never technically a trustee with legal control. These transfers still could have an influence on the estate taxes as the transfers could still be considered gifts and may exceed the annual gift tax exemption which would then count against the lifetime exemption that the estate could otherwise claim.

kite

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #71 on: February 20, 2021, 05:51:56 AM »
I think it sounds like you should hold it in a trust that outlines all this stuff. Otherwise it will very likely go to the next step according to CA law and could possibly go into probate.

Iíd thought of this, too. 
When we were in the midst of our estate planning, the attorney advised us that we were still (at the time) well below the financial net worth where a trust would saved our estate any taxes.  Itís possible to establish to have a certain measure of control far into the future, but there were cheaper ways to transfer assets outside of probate: naming beneficiaries directly on accounts, titling things jointly that will pass to the survivor, etc.
The trust still makes sense for our purposes for a few reasons, but for the average working or middle-class family, itís often a waste of money. 

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #72 on: February 20, 2021, 08:09:38 AM »
I think it sounds like you should hold it in a trust that outlines all this stuff. Otherwise it will very likely go to the next step according to CA law and could possibly go into probate.
I may be wrong, and someone correct if so, but I think if you hold title to a house as JTWROS even if unmarried the house by passes probate and automatically transfers to the joint owner. I do have my sister as primary beneficiary (with a charity as secondary if she dead) listed as the beneficiary on all my other financial assets including a small pension. I think all that by passes probate too. When I owned my house as sole owner I had a "transfer on death" deed recorded to leave it to her which I believe by passes probate too.

That's my understanding as well.

Things bypass the probate process in those ways, meaning that the executor doesn't have to go through the court process to get things distributed.  All that needs to happen - usually - is that the recipient provides a death certificate and then the asset passes to them.

Note that even though the assets bypass the probate process, they still usually are assets of your estate.  This primarily has to do with estate and inheritance taxes, so the values of those assets would be included for calculating those taxes.

...

Not that we generally like Californians up here, but if you and your BF want to visit Boise, I'm still down for that glass of water. ;-)
LOL! Warm Boise water (or maybe beer instead) sounds fun. Catch up on all the fun things we've been doing since the pandemic started...um...nothing ;-). I'm looking forward to the time we can all move about freely again. I don't think I've been out of Calif for over a year.

I'm not that familiar with trusts but I got what @MissPeach was saying I'd likely need one to set things up if BF and I bought a place together but held title as tenants in common instead of JTWROS and we would only "own" 50% each. Since it looks like we won't do that now I probably don't need a trust - at least in Calif but would have to figure out the rules in other states.

BTW the replies in this thread from others has helped me a HUGE amount so thanks everyone! 
« Last Edit: February 20, 2021, 08:12:31 AM by spartana »

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #73 on: February 20, 2021, 08:22:34 AM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

It's common to leave things to your closest living relatives, yes. Your state will have "intestacy" laws that make this explicit for people who die without wills. Here in Washington if you're married when you die your spouse will get all the community property. Otherwise your kids (or grandkids if your kids predeceased you) are next in line to split the pot. Your parents are next in line, then your siblings, then more distant relatives (grandparents, aunts, uncles, cousins). In this sense everyone has a will, it's just that if you don't bother to write it down they go with the default imposed by the state. If you don't want stuff going to your siblings, make sure to write that down.

Yes, I have a will because I know what happens otherwise. I just didn't know it was *expected*, as no one in my family on either side has ever done this, DH's either. Some kid-free folks have left money to nieces/nephews, but never to siblings. I've just personally never seen it.
I think that it use to be pretty common (and maybe even legally required) in many farm families like @Imma mentioned. It was a way to preserve the large acreage in one family unit for current and future heirs rather then be parcelled out and sold to multiple developers. So it was often parcelled out to various children or siblings if their were no kids and often bound up legally so they couldn't sell it to anyone but family.

Otherwise I think you are right that most people without kids themselves leave it to nieces and nephews (unless siblings are much younger) or charity if they don't have other family.
« Last Edit: February 20, 2021, 08:25:42 AM by spartana »

Cassie

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #74 on: February 20, 2021, 09:22:47 AM »
If I didnít have kids my siblings would be the last people I would leave a inheritance too.

Malcat

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #75 on: February 20, 2021, 09:54:10 AM »
If I didnít have kids my siblings would be the last people I would leave a inheritance too.

I quite like most of my siblings, but we're not particularly close. I haven't seen the brother I like best in years.

Imma

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #76 on: February 21, 2021, 05:14:39 AM »
It's expected to leave your estate to your siblings if you don't have kids???

That's news to me, and in my case, it's so not happening.

It's common to leave things to your closest living relatives, yes. Your state will have "intestacy" laws that make this explicit for people who die without wills. Here in Washington if you're married when you die your spouse will get all the community property. Otherwise your kids (or grandkids if your kids predeceased you) are next in line to split the pot. Your parents are next in line, then your siblings, then more distant relatives (grandparents, aunts, uncles, cousins). In this sense everyone has a will, it's just that if you don't bother to write it down they go with the default imposed by the state. If you don't want stuff going to your siblings, make sure to write that down.

Yes, I have a will because I know what happens otherwise. I just didn't know it was *expected*, as no one in my family on either side has ever done this, DH's either. Some kid-free folks have left money to nieces/nephews, but never to siblings. I've just personally never seen it.
I think that it use to be pretty common (and maybe even legally required) in many farm families like @Imma mentioned. It was a way to preserve the large acreage in one family unit for current and future heirs rather then be parcelled out and sold to multiple developers. So it was often parcelled out to various children or siblings if their were no kids and often bound up legally so they couldn't sell it to anyone but family.

Otherwise I think you are right that most people without kids themselves leave it to nieces and nephews (unless siblings are much younger) or charity if they don't have other family.

Yes, nieces and nephews are also pretty common, but we don't have any. So that's why we ended up with siblings. From a biological point of view it's still possible (but not likely) we could get nieces or nephews on my side, but not on Mr Imma's side. If we ever do have them, we could put them in our will, but as a childless person myself, I would kind of feel bad favoring the children of one of my siblings over my childless siblings or my in-laws.

So far, in my family leaving an inheritance to nieces and nephews has only happened when the parents were already deceased, but if the siblings are older and established and don't really need the inheritance, and nieces and nephews are just starting out, it makes a lot of sense to leave the money to them directly instead of their parents. We are in our 30s and when we wrote our will we were thinking of "what do we want to happen if we die tomorrow". I am the oldest, my siblings are a bit younger and not well off. Things may be different when we are all in our 50s and 60s and approaching retirement with paid-off homes. But as Mr Imma is my first heir, and he's healthy while I have a lifelong illness, the odds of me surviving him aren't that great. He can do what he wants with my money. I'd like for him to return some heirlooms to my family, pictures, jewelry and the family Bible, but he is under no moral obligation to leave them anything else.

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #77 on: February 21, 2021, 08:53:57 AM »
^^^I do think both age as well as how long you've been with an SO play a big part of how you want to leave an inheritence. When I married the (now ex) DH and I were 23 and left everything we had to each other since we didn't plan to have kids. We also worked the same job so equally funded everything even with seperate investments (set up years before we married). It was a no brainer and all our assets would go to the other if one of us died.

After we divorced around age 40 and with substantial assets, I knew I would set up my finances differently if I were to live with or marry another person. So leaving assets to kids or other family or charity instead of a well off and already FI SO when entering into a second marriage or buying a home together will probably be different the older people are if you are starting a pretty new relationship compared to your younger self.

spartana

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Re: Unmarried SOs buying a house together. How to hold title etc.
« Reply #78 on: March 14, 2021, 10:48:05 AM »
The right of the survivor to stay in the house doesn't necessarily have to be for life. It should be possible to have a trust written up so the survivor has the right to stay in the home for a number of years before the heirs could force a sale, with the survivor retaining the right of first refusal. This could balance the need for the survivor to have time to grieve, adjust, and make arrangements to buy out the heirs if desired against the heirs' desires to have use of their inheritance sooner rather than later. I'd want to ensure that the expiration of this situation would not fall on the anniversary of the death or another important anniversary, so I might have the period expressed as ending on the first day of the tenth calendar quarter following the death rather than two years.

This is what I suggested above. That something like a 2 year period be put in place, but also that the heirs never actually co-own the house, just that the house has to be sold within that timeline and the heirs are entitled to half of whatever profits are made from the sale when it happens.

If neither partner actually wants to end up co-owning the house with heirs, then why ever have the heirs inherit the physical house? That way you're never stuck fighting with heirs over any of the sale process. If you think updating the bathrooms before listing would be a good idea, you don't need to have all of the co-owners agree first.

It's at the very least worth looking into if indefinite renting isn't ideal.
Yeah renting forever isn't ideal at all and I imagine at some point relatively soon we will end up buying and than will have to wade thru the morass of legal crap to set something up.

The original pre-pandemic plan was for me to sell (which I did early last year and would have done anyways) and move in with him and we'd do some longer term travelling using his house as a home base. And then... well... that was it ;-)! Hadn't really thought beyond that. That's worked great this past year despite covid putting a damper on some plans but now he wants to sell too. So have to make decisions.

For the moment we will just rent a place in this area and explore other areas. One idea we had, and I like it, is to just GTFO of expensive Calif and buy a small inexpensive place elsewhere, pay our 50% each to buy with cash, do a deed so we each inherit the place (Joint Tenants with Surviorship Rights)  then each stash our individual remaining house sale proceeds in non-joint accounts that would go directly to our individual heirs. That way we each retain full ownership of a house to do what we want, don't have a very large amount of our assets tied up jointly, and neither needs to deal with the others heirs.  We are both FIRE individually so not financially dependent on the other persons money. What do you guys think?

Sounds like a good plan to move out of the place you don't like and move to a (cheap) place for your hobby. That is what we are looking for as well.
That's the plan but of course don t know exactly "where" we'd go but starting the looking process now that his place has sold and it closes soon. We've tossed around a few different ideas since I started this thread - including getting 2 seperate inexpensive places (owned separately rather than jointly) and doing the snowbird/sunbird thing but seems expensive and a big hassle so rather we buy one place jointly, or one of us buys solo and the other lives there,  or just rent a place together. We will likely rent together for now and look into buying further into the future.
« Last Edit: March 14, 2021, 10:51:23 AM by spartana »