Article 76-Estate Planning Series: So Who Gets the Home?

Written by Wright Law on . Posted in Estate Planning, Will

When counseling clients about estate planning, my primary objective is to help them maintain control of their estate.  This includes helping clients to ensure that, on their passing, their assets go to those they want to receive them.  This does not happen automatically.   

Take the example of a man with children from a prior relationship who purchases a home with his girlfriend.    Both he and his girlfriend’s names are on the deed to the home and on the loan.  When he dies, what will he have to pass on and to whom?

It is safe to say that the bank will ensure it will get paid.  Whatever this man may own of the home, that interest cannot be passed on until the bank has been ensured it will be paid.

What if the loan had been paid off?  This man can pass on his interest, but how much of the home is owned by him and how much is owned by his girlfriend?  If they were married, the question would be much easier to answer.  Almost always, payments made by a married person are considered to be made by the “community,” with each spouse receiving credit for half of the payment.  In other words, in most cases, ownership is divided equally between married couples.  However, if they are not married, there is no presumption that a payment is divided between the “community” because there is no marital “community.”

When this man passes away, this will create questions that may be difficult to answer.  One question will be “How much of the home is owned by this man?”  If he does not have a will, another question will be
“Who will receive his share of the home, the children or the girlfriend?” 

As I will explain in my next column, the answer to both questions may be quite complicated.  However, with some basic planning, the answers can be greatly simplified.

© 2016 Steven J Wright  

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