paulwong10013
New Member
Dear Legal Advisor:
Re: What is the best way to hold title of a house with possibility of divorce down the road?
I am a 50 years old school teacher; with a young wife of 30 years old living in New York City. I am making about $80,000/year and she is making $10,000/year. We have been married for 5 years with no child; but hope to have one in the next couple year. Recently, I signed a contract to buy a house; and my wife is a co-signer on the mortgage application for the house. This is my own decision to purchase this house, with my own money for down payment and plan to pay all monthly mortgage, property taxes and maintenance expenses etc myself. My wife don't want to pay anything because she wants to save some money since she don't earn too much.
However, because I need additional $5000 yearly income in order to be qualified to get the right mortgage for the house, so my wife is willing to be my co-signer for the mortgage loan.
Initially, I plan to put my name only on the deed after closing. Last week, my attorney asked me whether I want to put my wife's name on the deed; because he said the lender sometime may want the co-signer on the deed. At this point, I am very confused. I have been reading a lot of articles on estate planning, divorce and real estate, revocable trust, joint tenants and tenancy in common pros and cons of each. I have listed some of my concerns and goals.
Goals:
1. In case one day I got into accident and not here, I would like the house goes to my wife automatically without go through the probate court. (1. Sound like Joint tenants agreement on deed is a good idea. 2. But tenants in common with a will attached with my wife as my beneficiary also works as well; but this "will" thing will have to go through the probate court; and this will be wasting time and money.)
2. My wife has a hot temper; and I am not sure whether we will eventually divorce or not. But so far, we are getting along O.K. , I just want to plan for the worst. And I don't want to get stuck splitting the house with her since she has not contributed anything up to now, like rent, living expenses, & the down payment; and she is not willing to pay some mortgage payment etc in the future; and she is yet to give me a child.
3. I am thinking about using the tenancy in common with % indicated share of ownership (like 90% for myself and 10% for hear.) However, I heard in case of accidental death, my house has to go through the New York probate court and I have to make out a will first : she as my beneficiary or someone else---and it would be extremely costly to transfer the house to my wife since there are probate fee, estate tax and attorney fee involved.)
4. I heard if I use the Joint tenants agreement on deed, the house will pass to her automatically without going through the probate court. This is the least expensive approach. However, in case of divorce, she will get to keep half of the house unless there is a separate agreement to state that in case of divorce, she will not get any thing for the house because she has not contributed any down payment and mortgage payment etc.
5. After reading the following, I think at the closing, I can use a joint tenants agreement now; but at the same time, I can have a written agreement stating that I have 100% decision making power on selling the house or refinancing the house etc. she don't have the final say on important decision making on the house even though I would listen to her opinion—but she has to sign the paper if I need to sell the house for some reasons for example.
The agreement can include:
A. If she can give birth to a child, I will revise the agreement to deed 50% share of house to her and 50% of house to my child upon my death.
B. I will have a right to set up a irrevocable trust in the future to deed my house to my child and to my other family members like my father in law, my nephew etc. upon my death.
C. Any way, I would like to make the agreement flexible so I can add some more conditions to it if necessary; like if my wife can improve her temper and successfully raise a child and see that the child finish college, she will be rewarded as a result.
D. In anyway, I want my family to be protected in case of accidental death. However, I don't want my wife getting lazy and contributing nothing to the family .
Please advise me based on the above scenario; and let me know what is the best form to hold the deed? What do you think of joint tenants agreement on deed; and a separate agreement on the side stating that I am stilling maintaining 100% voting right on the house; and she has to agree anything I want to do with my house like selling, refinancing, hiring contractors etc. without the need to inform or get the permission from her. Even if she don't agree to refinance the house for example, but she still needs to sign the paper without choice.
Thank you for your advice and look forward to your solutions to my dilemma .
(Reference:
Changing the rules with a written agreement. Married couples don't have to accept the rules about what is community property and what isn't. They can sign a prenup, postnup or other written agreement that makyes some or all community property the separate property of one spouse, or vice versa.
Some community property can avoid probate. Several community property states offer an advantageous way of holding title to community property that avoids probate at the death of the first spouse. It's called "community property with right of survivorship." If a couple holds title to property -- a house, for example -- in this way, when one spouse dies the property will automatically belong to the survivor, without any probate court proceedings.
Next Step
If you are ready to take charge of your estate planning, get Plan Your Estate by Denis Clifford (Nolo). It provides the information you need to plan for the future, including how to draft a simple will.
Your property and divorce
You can own a property in 2 ways. The first is according to the Title Deeds and the second is according to your contributions to the property, this is called your "Beneficial Interest".
For example, the Title Deeds may have 2 names on the property and say that it is owned jointly, but your Beneficial Interest in the property (because of contributions you have made to the property etc.) might be held in equal or unequal shares.
If you hold the property jointly this does not automatically mean that on sale the proceeds will be divided equally. The court may have to consider also how the Beneficial Interest in the property is held. If this on a ratio of 70 / 30 for example, the court may divide the sale proceeds the same way.
There are of course other considerations which might mean that the court decides to ignore the Beneficial Interest. See Maintenance Issues.
If you hold property Jointly as "joint tenants" and your partner dies their share of the property will automatically pass to you. It does not matter that your partner has left a will expressing a wish for his or her share to go to someone else.
If you do not want your share to go automatically to your partner then you should consider asking your solicitor to "sever" the Joint Tenancy. This can be done by serving a written notice on your partner that the Joint Tenancy is severed (split). You will then hold the property as "Tenants in Common". This is still in joint shares, but it now means that if you die your share will go to whom ever you want it to pass to and you can make provisions for this in your will.
Unmarried Couples may find it better to own a property as Tenants in Common to avoid the problems of the property passing on their death to their partner or their partner's family and not members of their own family.
When you first buy a property your solicitor should ask you how you want to own the property and explain the difference between Joint Tenancy and Tenancies in Common to you.
If you are not sure how you hold the property don't worry. A solicitor can search the Land Registry for you to find out how the property is held. Details of all properties bought and sold have to be registered at HM. Land Registry with details of change of ownership. See National Searches telephone number
If you own property with your partner then you may need to decide what to do with the property after you separate. You may decide to sell and split the proceeds, or transfer your share to your partner, or buy out your partner's share. You could decide that you do not want to sell the property straight away and you want to stay there until the youngest child reaches 18 or finishes full-time education. You may need help from your partner to pay the mortgage, the court can order your partner to help with the mortgage payments.
The judge can decide what is to happen, so you must tell the judge what you want. You do this by preparing a statement known as an "Affidavit". You explain in your affidavit what income and savings you have and how much your expenses are. Your partner will also have to submit an Affidavit. If the case goes to court you will have to give evidence and tell the judge yourself about your financial position.
If you have not contributed financially to the home or the bills during the marriage you may still be entitled to make a claim. This is because you may have contributed in kind, for example by looking after the children so that your partner could work, or helping your partner with his or her business etc.
Even if the property is only in your partner's name you may still have a claim because the court may consider it to be "Matrimonial Property".
When deciding on what financial orders to make the court considers issues such as:
1. The length of the marriage. (if it was a short marriage you may receive less from your partner)
2. You and your partner's age (if you are still of working age then you have a better chance of earning income in the future)
3. You and your partner's needs (for example you may have enjoyed a luxurious lifestyle and seek to be maintained in a similar lifestyle after the divorce)
4. You and your partner's earning capacity (if your partner has a chance to earn more than you in the future, you may need more help from your partner)
5. The needs of the children, if the children are living with you then again you may require more help.
These are just some of the issues that the court will consider, when deciding whether to transfer ownership of the property, sell the property, make orders for maintenance or lump sum payments.
The court has the power to transfer tenancies between married couples. The person to whom the tenancy is transferred might have to pay compensation to the person who has to leave.
Re: What is the best way to hold title of a house with possibility of divorce down the road?
I am a 50 years old school teacher; with a young wife of 30 years old living in New York City. I am making about $80,000/year and she is making $10,000/year. We have been married for 5 years with no child; but hope to have one in the next couple year. Recently, I signed a contract to buy a house; and my wife is a co-signer on the mortgage application for the house. This is my own decision to purchase this house, with my own money for down payment and plan to pay all monthly mortgage, property taxes and maintenance expenses etc myself. My wife don't want to pay anything because she wants to save some money since she don't earn too much.
However, because I need additional $5000 yearly income in order to be qualified to get the right mortgage for the house, so my wife is willing to be my co-signer for the mortgage loan.
Initially, I plan to put my name only on the deed after closing. Last week, my attorney asked me whether I want to put my wife's name on the deed; because he said the lender sometime may want the co-signer on the deed. At this point, I am very confused. I have been reading a lot of articles on estate planning, divorce and real estate, revocable trust, joint tenants and tenancy in common pros and cons of each. I have listed some of my concerns and goals.
Goals:
1. In case one day I got into accident and not here, I would like the house goes to my wife automatically without go through the probate court. (1. Sound like Joint tenants agreement on deed is a good idea. 2. But tenants in common with a will attached with my wife as my beneficiary also works as well; but this "will" thing will have to go through the probate court; and this will be wasting time and money.)
2. My wife has a hot temper; and I am not sure whether we will eventually divorce or not. But so far, we are getting along O.K. , I just want to plan for the worst. And I don't want to get stuck splitting the house with her since she has not contributed anything up to now, like rent, living expenses, & the down payment; and she is not willing to pay some mortgage payment etc in the future; and she is yet to give me a child.
3. I am thinking about using the tenancy in common with % indicated share of ownership (like 90% for myself and 10% for hear.) However, I heard in case of accidental death, my house has to go through the New York probate court and I have to make out a will first : she as my beneficiary or someone else---and it would be extremely costly to transfer the house to my wife since there are probate fee, estate tax and attorney fee involved.)
4. I heard if I use the Joint tenants agreement on deed, the house will pass to her automatically without going through the probate court. This is the least expensive approach. However, in case of divorce, she will get to keep half of the house unless there is a separate agreement to state that in case of divorce, she will not get any thing for the house because she has not contributed any down payment and mortgage payment etc.
5. After reading the following, I think at the closing, I can use a joint tenants agreement now; but at the same time, I can have a written agreement stating that I have 100% decision making power on selling the house or refinancing the house etc. she don't have the final say on important decision making on the house even though I would listen to her opinion—but she has to sign the paper if I need to sell the house for some reasons for example.
The agreement can include:
A. If she can give birth to a child, I will revise the agreement to deed 50% share of house to her and 50% of house to my child upon my death.
B. I will have a right to set up a irrevocable trust in the future to deed my house to my child and to my other family members like my father in law, my nephew etc. upon my death.
C. Any way, I would like to make the agreement flexible so I can add some more conditions to it if necessary; like if my wife can improve her temper and successfully raise a child and see that the child finish college, she will be rewarded as a result.
D. In anyway, I want my family to be protected in case of accidental death. However, I don't want my wife getting lazy and contributing nothing to the family .
Please advise me based on the above scenario; and let me know what is the best form to hold the deed? What do you think of joint tenants agreement on deed; and a separate agreement on the side stating that I am stilling maintaining 100% voting right on the house; and she has to agree anything I want to do with my house like selling, refinancing, hiring contractors etc. without the need to inform or get the permission from her. Even if she don't agree to refinance the house for example, but she still needs to sign the paper without choice.
Thank you for your advice and look forward to your solutions to my dilemma .
(Reference:
Changing the rules with a written agreement. Married couples don't have to accept the rules about what is community property and what isn't. They can sign a prenup, postnup or other written agreement that makyes some or all community property the separate property of one spouse, or vice versa.
Some community property can avoid probate. Several community property states offer an advantageous way of holding title to community property that avoids probate at the death of the first spouse. It's called "community property with right of survivorship." If a couple holds title to property -- a house, for example -- in this way, when one spouse dies the property will automatically belong to the survivor, without any probate court proceedings.
Next Step
If you are ready to take charge of your estate planning, get Plan Your Estate by Denis Clifford (Nolo). It provides the information you need to plan for the future, including how to draft a simple will.
Your property and divorce
You can own a property in 2 ways. The first is according to the Title Deeds and the second is according to your contributions to the property, this is called your "Beneficial Interest".
For example, the Title Deeds may have 2 names on the property and say that it is owned jointly, but your Beneficial Interest in the property (because of contributions you have made to the property etc.) might be held in equal or unequal shares.
If you hold the property jointly this does not automatically mean that on sale the proceeds will be divided equally. The court may have to consider also how the Beneficial Interest in the property is held. If this on a ratio of 70 / 30 for example, the court may divide the sale proceeds the same way.
There are of course other considerations which might mean that the court decides to ignore the Beneficial Interest. See Maintenance Issues.
If you hold property Jointly as "joint tenants" and your partner dies their share of the property will automatically pass to you. It does not matter that your partner has left a will expressing a wish for his or her share to go to someone else.
If you do not want your share to go automatically to your partner then you should consider asking your solicitor to "sever" the Joint Tenancy. This can be done by serving a written notice on your partner that the Joint Tenancy is severed (split). You will then hold the property as "Tenants in Common". This is still in joint shares, but it now means that if you die your share will go to whom ever you want it to pass to and you can make provisions for this in your will.
Unmarried Couples may find it better to own a property as Tenants in Common to avoid the problems of the property passing on their death to their partner or their partner's family and not members of their own family.
When you first buy a property your solicitor should ask you how you want to own the property and explain the difference between Joint Tenancy and Tenancies in Common to you.
If you are not sure how you hold the property don't worry. A solicitor can search the Land Registry for you to find out how the property is held. Details of all properties bought and sold have to be registered at HM. Land Registry with details of change of ownership. See National Searches telephone number
If you own property with your partner then you may need to decide what to do with the property after you separate. You may decide to sell and split the proceeds, or transfer your share to your partner, or buy out your partner's share. You could decide that you do not want to sell the property straight away and you want to stay there until the youngest child reaches 18 or finishes full-time education. You may need help from your partner to pay the mortgage, the court can order your partner to help with the mortgage payments.
The judge can decide what is to happen, so you must tell the judge what you want. You do this by preparing a statement known as an "Affidavit". You explain in your affidavit what income and savings you have and how much your expenses are. Your partner will also have to submit an Affidavit. If the case goes to court you will have to give evidence and tell the judge yourself about your financial position.
If you have not contributed financially to the home or the bills during the marriage you may still be entitled to make a claim. This is because you may have contributed in kind, for example by looking after the children so that your partner could work, or helping your partner with his or her business etc.
Even if the property is only in your partner's name you may still have a claim because the court may consider it to be "Matrimonial Property".
When deciding on what financial orders to make the court considers issues such as:
1. The length of the marriage. (if it was a short marriage you may receive less from your partner)
2. You and your partner's age (if you are still of working age then you have a better chance of earning income in the future)
3. You and your partner's needs (for example you may have enjoyed a luxurious lifestyle and seek to be maintained in a similar lifestyle after the divorce)
4. You and your partner's earning capacity (if your partner has a chance to earn more than you in the future, you may need more help from your partner)
5. The needs of the children, if the children are living with you then again you may require more help.
These are just some of the issues that the court will consider, when deciding whether to transfer ownership of the property, sell the property, make orders for maintenance or lump sum payments.
The court has the power to transfer tenancies between married couples. The person to whom the tenancy is transferred might have to pay compensation to the person who has to leave.
