How will you take title to the property?
In Wisconsin, unmarried people can hold title to real property in two ways: as joint tenants, or as tenants in common. In most cases, committed couples intend that the property be held in joint tenancy, so that if one dies, the other will hold title to the entire property. Many times, however, unmarried owners hold the property as tenants in common. That means that if one dies, the survivor owns only 50%; the other 50% is owned by the deceased parties' heirs. If there is no will, Wisconsin's law of intestate succession in many cases would pass the deceased's share to his or her parents--often leading to inequitable results. For example, suppose Jason and Jen have lived in the house they purchased together for 10 years. They have no children. Jason dies in a car accident without a will. Jason's parents now own 50% of the equity in the house, and Jen has to either buy them out or sell the house to pay them what they are owed.
How was the down payment divided between the two owners?
In Wisconsin, in the absence of a written agreement or notation on the deed, the courts will presume that joint tenants of real property have each contributed 50% of the equity and other additions to the real property. I am aware of court cases in which one party presented evidence of contributions in excess of 50%; but the court nonetheless found that each party was a 50% owner. The message to unmarried parties is: you must put your agreement in writing! Documentation of the dollar amount of your contributions is not enough. And if the parties have agreed to something other than a 50/50 division of real property ownership, in most cases I recommend that this be reflected on the deed itself. Of course, each situation must be analyzed separately by an attorney.
What about ownership of personal property?
When two people set up a home, each typically brings some personal property to the common living situation. In addition, they often buy other items together. If they later split the arrangement, either by death of one of the parties or by termination of the living arrangement, ownership of the personal property becomes an issue. Accordingly, documentation of separately owned property and jointly owned property is important. Unromantic as it sounds, the parties must keep track of this from the beginning. Keep a schedule of individually owned and jointly owned property, complete with descriptions, values, and percentage owned by each party.
See a lawyer to draw up an agreement. Our laws don't protect unmarried persons who own property together, so you need to protect yourself.
Contact an attorney to give your relationship and your property the protection to which you would be entitled if you were married. That protection doesn't come automatically, and the consequences can be unexpected and devastating. Make sure that you are informed and protected. ( As a sideline to the topic of this article--if there are children involved, it is very important to provide for their care and protection in the event of their parents' death.) Remember those high school presentations about how having sex with someone means you are also having sex with all of that person's sex partners? Well, the same is true for your partner's credit. Too many times, I have seen clients in my office who purchased property with an ex, and learned only at or just before the closing that the property couldn't be sold because the ex owed tens (or hundreds) of thousands of dollars to judgment creditors. Usually, the only option in such cases is foreclosure or bankruptcy.
Have an Exit Strategy
Most relationships don't last forever. Wisconsin's family law statutes and case law, in most cases, don't apply to unmarried couples. That means that unmarried couples should discuss and agree upon equitable property division in the event their union would end.