Having roommates can be great at any age.
Whether you have never been married, are divorced or have recently been widowed, sharing a house together can be a smart move.
You can live with your best friends.
You can share responsibilities.
You can spend less and get more for housing.
According to a recent NJ 101.5 article, titled “Buying a retirement home together,” you need to consider two primary issues: death and irreconcilable differences.
How do you prepare for these?
Carefully title your property.
Joint Tenants with Rights of Survivorship (JTWROS)
With Joint Tenants with Rights of Survivorship, the property is owned equally and as a whole.
Can you transfer the property?
For example, in Kansas and Missouri, if you want to "sever" the joint tenancy by transferring your undivided interest to your living trust, then you can without any prior approval of the co-owners.
What happens when you die?
When you die, your share will passed automatically to the other owners—no matter what your will says.
Tenants in Common (T-I-C)
With Tenants in Common (T-I-C) the property is retained independently in equal or unequal shares by the owners.
In short, each owner maintains complete control over his or her share.
Obviously, you can transfer your share at any time without the consent of the other owners.
How is the property transferred at death?
When you die, your share of the property will be transferred according to your will, making this basic element of estate planning necessary for both parties.
Because estate planning plays an important role in property ownership, you should work with an experienced estate planning attorney to ensure the titling of the property aligns with your estate planning goals.
You and your roommates should communicate about your respective desires when it comes to the ownership form and how each interest should pass at death.
With the planning complete, you can make memories with your roommates worry free.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: NJ 101.5 (August 2, 2016) “Buying a retirement home together”