Marital Rights and How Couples Own Property Together
If you’re married and thinking about buying a house, you’ll hear a lot of legal terms—"joint tenancy," "tenancy by the entirety," "community property." They sound complicated, but the basics are easy once you break them down.
What Legal Ways Can a Couple Hold Title?
The most common ways are joint tenancy with right of survivorship (JTWROS) and tenancy by the entirety (TBE). JTWROS works for any married couple: both names are on the deed, and if one person dies, the other automatically inherits the full share. TBE is only for married couples in a few states, but it adds extra protection against creditors. If you file for divorce, the court usually splits the equity, but the title type can affect how smooth that process is.
Taxes, Inheritance, and What Happens When One Spouse Passes Away
When you own property together, a few tax rules kick in. The mortgage interest deduction can be split between you, and each spouse can claim their portion of property tax. If one partner dies, the surviving spouse often avoids capital gains tax on the primary residence, provided the home was lived in for two of the last five years. For jointly owned shares in a shared‑ownership building, the surviving spouse usually steps into the deceased’s spot automatically, but it’s worth checking the lease or co‑ownership agreement for any special clauses.
What if you didn’t set up the right ownership type? You might end up with a probate process, which can delay the transfer of ownership and add legal fees. Keeping a clear, updated will and naming the surviving spouse as the primary beneficiary can skip probate in many cases.
Divorce is the other big moment where marital rights matter. Courts look at the equity each partner built during the marriage, not just who’s on the deed. If you’re in a community‑property state, half of the home’s value is split regardless of whose name is on the title. In common‑law states, the court considers contributions, both financial and non‑financial, like raising kids or doing renovations.
To protect yourself, consider a post‑nuptial agreement that spells out what happens to the house if you split. It doesn’t have to be a heavyweight document—just a clear statement of ownership percentages and who pays what.
Don’t forget about insurance. Joint owners should each be listed on the homeowner’s insurance policy. If one spouse is the primary borrower on the mortgage, the lender may require that person’s name stay on the title until the loan is paid off.
Finally, keep the paperwork current. When you refinance, add a spouse to the new loan, or make major improvements, update the deed if needed. A small slip, like forgetting to add a new name after marriage, can cause headaches down the road.
Bottom line: Choose the ownership type that matches your state’s rules, keep tax and insurance details straight, and have a plan for divorce or death. A quick chat with a solicitor or a mortgage adviser can save you months of hassle later.