Like other legal areas in Texas, gay and lesbian couples have unique needs to consider when purchasing a house together. In most real estate purchases, there are two very important items: (1) the deed and (2) the mortgage. The details in both the deed and the mortgage are important for everyone, but require special consideration for same sex couples and unmarried heterosexual couples.
How do you ensure that both partners have ownership rights?
In order to ensure that both partners have ownership rights to the real estate property, both partners’ names need to be on the deed. This makes it clear that both partners have an ownership interest in the property.
However, placing both partners’ names on the deed alone does not automatically make the surviving partner the sole owner of the property upon the death of the other partner. Since Texas law presumes that each partner owns an undivided one-half of the property, the deceased partner’s interest in the property may be transferred to that partner’s heirs and/or beneficiaries instead of the surviving partner. The surviving partner may then be left sharing the home with the deceased partner’s heirs.
In order to ensure that the surviving partner is the sole owner of the real estate property upon the other partner’s death, the couple can enter into a contract called a “Joint Tenancy With Right of Survivorship Agreement.” This agreement between the partners provides that upon the death of one of the partners, the ownership in the real estate will go to the surviving partner. This agreement must be signed by both partners, and filed in the real property records.
Don't rely on your title company
When purchasing a house together, it is unlikely that the title company will include a Joint Tenancy With Rights of Survivorship Agreement in their standard deeds. Which means Partners need to take it upon themselves to sign and file a separate agreement. The agreement needs to be filed with the county clerk for the county where the property is located. This agreement ensures that the real estate property will go to the surviving partner at the time of the deceased partner’s death. This also allows the transfer of the property outside of a Will and bypasses the probate process.
Be careful of how you set up your mortgage
An often overlooked area is that of the mortgage. In order to ensure that the mortgage on the property is not affected by the death of one of the partners, both partners should apply for and be obligated on the mortgage at the purchase and/or refinance of the property. That way, the death of one partner will not, generally, accelerate the mortgage nor require the surviving partner to refinance the property later. Sometimes, that's not an option available to couples. Sometimes, to get the best rates and terms or to qualify in general, only one partner will be subject to the mortgage. In those cases, a careful review of mortgage documents, proper estate planning, and perhaps even additional life insurance, can ease some or all of the burdens an acceleration clause can bring.
Get an attorney to help ... you'll be glad you did
Same sex couples should seek the advice of a competent attorney that understands their unique needs to help in planning and drafting these documents, and assisting in the purchase or transfer of your real estate.
To get more information on how to conduct real-estate transactions for same-sex couples, click here or contact us for a free phone consultation.