cancel
Showing results for 
Search instead for 
Did you mean: 

Keeping a first home separate....

tag
sunshine24
New Contributor

Keeping a first home separate....

My husband and I are planning to buy a home together next summer. He already owns a home already that he's renting out. He's right about even on the value vs what he owes (due to the currently lower real estate values) and the tenants are paying rent, which washes the mortgage. He plans to keep this first property separate, which is fine with me. He says that if something happens to him, I am to "just let the property go" - meaning just walk away from it. He claims that since my name isn't on the deed, I am not in any way responsible for it. That feels weird to me. Won't his life insurance policies go into probate (I am his only beneficiary) and they require the mortgage for his separate to be paid off out of that? And could his tenants sue me?  Would it affect the home we buy together? Or is this a legal question for another forum on a different website? Not that he's going anywhere but we just had this conversation and I have concerns about buying a home with these issues hanging overhead. Smiley Happy


Starting Score: 608 EQ (FICO) 8/11/11
Current Score: 713 EQ (FICO) 2/14/13
Goal Score: 750


Take the FICO Fitness Challenge
Message 1 of 12
11 REPLIES 11
GregB
Valued Contributor

Re: Keeping a first home separate....

It is a complicated question and nobody can even start to answer it unless they are familiar with the laws in YOUR state. There are details that can best be worked out with an estate planner or wills and trust attorney. Details on life insurance policy will need to be considered but your concern about the life insurance paying off the mortgage does not sound right to me.

 

In my state, it would be best to have this planned out BEFORE you were married as it is a good trick to keep everything separate.

 

I'm curious about the advantage to let it go if something happens to him.

Message 2 of 12
sunshine24
New Contributor

Re: Keeping a first home separate....

Thanks for the advice. There is no advantage to letting it go, should something happen. I can't afford it, pure and simple. He can afford to pay for the separate house (especially if it goes un-rented for a time) plus half of the one we buy together. I would be lucky if I could afford the house we buy together on my own, should something happen to him. However, he does not want to get rid of the first property. His goal is to build a real estate portfolio. I'm curious about my responsibility and about what would happen to the property purchased together.


Starting Score: 608 EQ (FICO) 8/11/11
Current Score: 713 EQ (FICO) 2/14/13
Goal Score: 750


Take the FICO Fitness Challenge
Message 3 of 12
IOBA
Senior Contributor

Re: Keeping a first home separate....

What state do you live in?

 

Message 4 of 12
StartingOver10
Moderator Emerita

Re: Keeping a first home separate....

GregB has an excellent point. Meeting with several attorney's to discuss you and your husbands estate options prior to marriage is prudent given your concerns. The time to set up a trust or whatever combination of instruments that works for you is best done prior to your marriage and while you are solvent and not having any financial difficulties. A pre-nup might help as well, or in your case, a "post-nup".  A good estate attorney can help you with the entire plan.

 

I only suggest meeting a couple of different attorney's that specialize in estate planning is to make sure you are working with one that has your financial interests and other concerns in sync with you. It's not as expensive as you might think at all. It certainly will help remove any worries you have regarding dispostion of the property.

 

As to life insurance to cover the debt, that is a viable option. Speak to the attorney and to your insurance agent to get alternatives. Remember too, if the property is worth more than the mortgage, it can be sold at the time so you won't have to go through the foreclosure process.

 

 

Message 5 of 12
drkaje
Senior Contributor

Re: Keeping a first home separate....


@sunshine24 wrote:

Thanks for the advice. There is no advantage to letting it go, should something happen. I can't afford it, pure and simple. He can afford to pay for the separate house (especially if it goes un-rented for a time) plus half of the one we buy together. I would be lucky if I could afford the house we buy together on my own, should something happen to him. However, he does not want to get rid of the first property. His goal is to build a real estate portfolio. I'm curious about my responsibility and about what would happen to the property purchased together.


Why is affordability only an issue on properties included in his real estate portfolio?

 

If you're not in a community property state, leaving a new spouse off an old property will greatly simplify life..... if stuff happens. Smiley Happy I don't see a problem if that's the reason and it's openly/honestly discussed but affordability doesn't really make sense, especially since he's planning on buying more properties. He may simply feel the marital home is the only property jointly owned.

 


Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO


Take the FICO Fitness Challenge
Message 6 of 12
sunshine24
New Contributor

Re: Keeping a first home separate....

Affordability is an issue for me, as we live in a very expensive real estate area. If something happened to him, I will probably be struggling with the home we purchase together and I don't want to have to worry about his other property and tenants. We have agreed to each pay half of the home we buy together. He (or his tenants) will pay 100% of whatever he owns separately and I am not involved or on the deed. This is how he wants to handle it. He does feel the the marital home should be the only jointly owned property, which I am ok with. We live in a community property state so I don't really know if it's all pointless anyway. Even if my name is not on the deed of his first property, since we're in a community property state, am I on the hook anyway?


Starting Score: 608 EQ (FICO) 8/11/11
Current Score: 713 EQ (FICO) 2/14/13
Goal Score: 750


Take the FICO Fitness Challenge
Message 7 of 12
drkaje
Senior Contributor

Re: Keeping a first home separate....

@ Sunshine,

 

I think it would take a lawyer or someone more experienced (from a community property state) to answer that question.


Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO


Take the FICO Fitness Challenge
Message 8 of 12
JM-AM
Valued Contributor

Re: Keeping a first home separate....

If the homes are not paid then yes legally the Lenders can come after you for the debt, in a community property state.

 

But as mentioned, legal advice is a much better choice then listening to myself.

Good Luck
May all your dreams and wishes become a reality!
Message 9 of 12
Peterson
Member

Re: Keeping a first home separate....

According to my knowledge, building your own home is better than buying home becuase you can build a home of your choice. I also build a home by some professional builders with reasonable price and I am totally satisfy with them, try to search for some these kind of builders.

Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.