House Miniature and Coins and Key


Gregory S. DuPont, JD, CFP Oct. 10, 2023

At a time of record home unaffordability, more people are teaming up with friends and family to realize the homeownership dream. According to the National Association of Realtors (NAR), more than 75% of homes on the market now are too expensive for middle-income buyers. Just five years ago, this same income group could afford half of all available homes. From 2010 to 2020, the number of homes bought by people with different last names soared by more than 770%. This group includes friends, roommates, and married couples.

Purchasing a property with other people can help a buyer lower their individual costs while building equity. But, going in on a house together can also create trouble spots, including survivorship and inheritance issues. A home is the largest single investment that most people make. When buying a home with another person, the co-owners must decide how to hold the title so that it aligns with their financial and estate planning goals.

Co-Ownership and Home Titles

Co-buying a home can reduce the costs of the down payment, mortgage payments, utilities, and other household expenses for each buyer. Some co-buyers may even want to rent their space out or flip it for a profit.

Although co-ownership has its benefits, it can present problems as well. If one buyer has a bad credit score, it can negatively affect another buyer’s mortgage terms. And if one party cannot meet their financial obligations, the other party could be on the hook for the budget shortfall.

Typically, co-owners are not only listed together on the mortgage loan, but on the home title as well. Having more than one person on the title may raise estate planning issues in the future.

Property can be titled in different ways. Common ways of joint ownership titling include tenants in common and joint tenants with right of survivorship.

  • Tenants in common. With this type of title, property shares may or may not be divided equally between owners. Each owner’s share may be equal to their investment in the property. However, the co-owners still have equal rights to use all areas of the property. They can also choose who receives their interest when they die; it does not automatically pass to the other owner(s).

  • Joint tenants with right of survivorship. Under this arrangement, each owner has an undivided interest in the property. They own the property in equal shares and have the right to use the property however they wish. The right of survivorship means that, when one of the joint owners dies, their property interest passes to the surviving joint owner(s).

Joint Ownership and Estate Planning

Around 60% of Americans don't have a will, but the percentage without an estate plan is highest among Millennials (78%) and lowest among Baby Boomers (58%).

One of the top reasons cited for failing to address estate planning is a presumed lack of assets to leave to anyone. This is a myth. Estate planning is advisable no matter how many assets a person has — especially if they are a homeowner.

For most people, a home is their greatest investment and the primary driver of household wealth. Even if somebody co-owns a house, their investment in the property is likely to dwarf their other accounts and property.

Deciding what to do with shares of a jointly-owned property is a major estate planning consideration. And it begins at the time a property is purchased and the title is issued.

When co-buying a house, each owner should understand how it is being titled and make sure the titling matches their estate planning wishes. For example, joint tenancy might make sense for a married couple but be a poor choice for friends because they give up the right to leave the property to anyone other than the co-owner. In the latter case, tenancy in common is likely a better option. Each tenant in common has the power to dispose of their property interest however they choose—but only if they indicate their wishes in their estate plan. Otherwise, their share of the property passes according to state law when they die.

For those who already own a house, how the property is titled is no less important to their estate plan. Circumstances change. The original title terms may no longer reflect a person’s current priorities. While changing a joint tenancy may not always be possible or practical, at the very least, a person should know how a home title affects their property rights, the rights of any heirs, and tax obligations.

Get Your Estate Planning House in Order

Choosing how to title a co-owned home, and how this choice fits into your estate plan, depends on the people and property involved, your estate planning goals, and state law. Our experienced estate planning attorneys in Dublin, OH can help explain the pros and cons of different titles, deeds, and other estate planning tools. Call our office today at 614-389-9711 to make an appointment.

Want to know about other deed options? And how they fit into your overall estate plan? Download our guide, How to Keep Your Home in the Family here.