What’s love got to do with it? Real Estate Investing 101 for married and unmarried couples.

Transcript

good afternoon everyone here's stephanie garces with pink mic legal confessions thank you so much for joining us today we are talking about a very interesting topic today i think you're really going to appreciate because it's a little bit different than some of our other ones we've done but you know that song what's love got to do with it that's what we're talking about today what's love got to do with it and specifically real estate investing 101 for married and unmarried couples so just so you know in this world that we live in things are traditional in some ways and very untraditional some of the untraditional things that people are doing now more than ever is buying houses together and they're not married now it's not just a great song what's love got to do with it which it's a good song but it's just not just not a great song there's actually more to it it's a question about um what happens when you tie directly real estate transactions and your personal life how are these mingled together and how can you handle and address these issues when individuals are buying property together but they're unmarried um maybe you have a long time partner um mother of your children or father of your children but you're not married so whether you're married whether you're engaged unmarried purchasing a property together there's a massive commitment that goes into this you already know that though i didn't have to tell you that but there's in many ways it's very similar to a marriage contract or you know i've actually heard judges refer to it as a partnership um and i'll tell you about that in a second but yes it is a huge commitment and really it's a in agreement between two people um these parties agree to the financial obligations the upkeep uh with the property and all of the things in between that go into having a house that is all made in the process so in this week's episode we're discussing real estate and estate planning um really what is the best plan when it comes to buying a property when someone is married or unmarried um and particularly what is the path to doing this and protecting yourself so i'm not sure if you missed last week's episode but we talked about why as real estate investors if you're thinking about it or you know somebody why do they hire an attorney really important so a lot of successful real estate investors do hire an attorney but real estate investing is not easy so every deal has its risks um with the hope of some sort of high reward whether that's long term or short term but the point i'm trying to make is investors who balance the right amount of this cautious decision making do have an attorney so if you didn't see that last week definitely check it out on our facebook page or on youtube where you can find it as well so just kind of running back to what we were talking about earlier is when we talk about real estate and we talk about people that are married or not married there are rights that hum that people have especially when they buy a property um now many people say to me you know what does it matter we're gonna buy this together and it is what it is but what happens is not everything is always happy when it comes to relationships and so uh we're going to talk a little bit about that today but i just wanted to kind of touch base for anyone that's just watching my name is attorney stephanie garces i'm the owner of garces law firm where we help parents prepare for the unexpected and now helping individuals with their real estate matters especially when it comes to unmarried couples or people that are buying together and don't necessarily have a marriage as part of the equation so uh again buying a home is with your significant other is huge it's a huge step it may be your relationship really exciting i love helping couples especially those that have been really searching for their for their home for a long time and being able to be part of that chapter is very rewarding for me so this often marks the start of a new chapter for anyone's life especially when um typically couples have to put their monies together especially when they're unmarried to buy a home and so did you know that unmarried couples purchase homes that account for about 20 percent of home sales in just the this year alone i mean 2021 has been a crazy year over excuse me 2022 has been a crazy year already but in the last year 2021 there was a statistic that came out 20 of people that are buying really made up for unmarried couples so to me that's really interesting because not everybody is married when they're buying doesn't matter you know you could still buy it that way but everyone always asks what happens if we break up what happens if we don't see eye to eye no what are my rights so that's why this episode is dedicated to couples and what a great time to talk about this because we just had valentine's day and love is in the air and i just love talking about these things so um i'm so grateful that you're watching and we're going to talk to some of the audience members today who shared um you know their thoughts on and questions about this matter so like i said today's episode is called what's love got to do with it real estate one investing 101 for married and unmarried couples so when you enter into any marriage you enter into a contract well purchasing a property is really no different between married and unmarried couples to an extent however there are some legal differences as to what rights the law says you have and really how the outcome turns out if you don't see eye to eye especially when it comes to trying to sell the property or if you don't want to sell the property sometimes people that buy homes together do not agree and by the way even though we're talking about unmarried couples we can also include in this conversation individuals that are buying homes with their siblings perhaps someone who's a friend a business partner these are still two individuals that are not romantically involved it can also apply to that but for today's focus it is about couples so on our agenda this afternoon we're going to be talking about how to discuss finances a plan for actually the cost of a home for a couple so for many of you this may be the first time that you're having to put all your financial cards in the table and that's never an easy conversation if you guys know anything about money money is very different depending on who you ask because we all grow up with different ideas of what we think um money can be how can be used what it can be managed um how it can be managed how you can really put it in this direction or in that direction so i've had clients talk about it all um and a lot of times we are part of this conversation and while there is attorney client privilege and i can't share with you what some of my clients have said but i do see financial decisions between couples being one of the hardest conversations to have because again depending on how you're raised you may think about money completely different than your significant other and that's okay but the conversation still needs to take place um another thing we're going to talk about is the traditional real estate transactions for couples um especially when it comes to the lending side of things uh the timeline that leads up to the closing uh another thing we're going to discuss is additional steps for unmarried couples that can take they can take especially when it comes to legal tips um when it comes to lending versus whose name do we put the loan on is it both um how do we split up the costs you know is there some sort of agreement partnership agreement you can put together together um joint venture agreements are used very often so that's also something we talk about uh the contingency plan also is something that we're gonna discuss um everyone's least favorite discussion is really talking about what happens if it doesn't work out the amount of people that come to see me after they bought the property with a significant other that it didn't work out is really really significant so the reason i bring this up is because a lot of people don't want to think about this they don't want to think about breaking up especially if you've already committed to this person um whether it's through transaction or you know your life years of your life so we'll talk about that um and also we're going to discuss estate planning a little bit uh purchasing a property is super important when it comes to the asset your portfolio of things that you own in your name so from a standpoint of legalities and your financial profile be sure your estate planning documents are up to date or you have something in place so as i mentioned earlier i'm just going to recap again for some of you that are just watching we are covering today what's love got to do with it real estate investing 101 for married and unmarried couples my name is attorney stephanie garces donat owner of garces law firm where we help you prepare for the unexpected we help individuals we help parents we help now couples that are married or unmarried secure their legacy especially when it comes to their financial future especially when it comes to real estate because real estate for many of us it's our biggest biggest investment we've made in our lives and i would even argue that it could be the most uh you know expensive and long-term investment that you'll make in your life so if you missed the last episode like i said you can check it out on our youtube channel it's really good so you can always join us here tuesdays at one o'clock so you can discuss with your clients or excuse me maybe your clients maybe your family members but with our clients we discuss this stuff in in practice but we really like to share this with our viewers as well so as i said i'm going to go through a couple of questions that we've got already since i've been sitting here from our viewers just to discuss what is it that people are so curious about when it comes to buying but maybe you're unmarried and what's love got to do with it so we're going to jump right in so the first thing um that i i get questions about all the time quite often and actually it's it's a hard question to answer sometimes is is there a way to legally document who would keep the home if we are separated now as an attorney i'm going to tell you there's always something you can do when it comes to agreements and agreeing to certain things when it comes to your real estate property especially when you buy with the someone that isn't your is it your husband or your wife or your your spouse uh legally so yes there is a way um to document this many times depending on the couple and really the family dynamic when people are unmarried and buying sometimes we have concerns about um what would happen if they break up or what happens if things don't pan out and someone has to move out because they're unhappy with the other person there are agreements that can be in place joint venture agreements are really um popular um a formal contract can be put together to say what actually happens in the event that someone maybe breaks up with the other or perhaps the couple doesn't stay together there's a lot that can be done now the interesting part about this is that i think many times um the conversation that needs to take place regarding real estate and regarding unmarried couples and what would happen if they don't stick together it's hard for it to come together because people feel what is the word awkward and comfortable um many people feel you know why should we talk about this it's almost like what is the word wishing you bad luck i guess you can say so i have a lot of people that don't want to talk about this topic it's taboo and it really should be discussed especially if you have a concern there are definitely contracts you could put together an attorney can put these together for you to kind of really shield you and create these silos for your rights perhaps you say okay if we break up we sell the house and each of us gets 50 50. that seems fair right but it's not always like that see the thing is what we haven't accounted for in this question is we haven't accounted for the scenario where one of the individuals buying the home actually puts in more money than the other person and maybe the other person puts more money towards maintenancing the house for example and that person says well i've i'm gonna be taking care of the bills um and you're gonna take care of the mortgage but then who put down the down payment was it yours was it a gift from your parents i mean i've seen it all and and it's very interesting because although yes an agreement can always be put together to help with protecting your rights especially if you are buying with someone that's not secret significant other um you do have to make sure you account for every single dollar how it got there um what did you use for the down payment if you had any uh what did you use for closing costs who put in the earnest money who's going to be paying the mortgage who's going to be maintenancing i mean the questions are just like there's just so many questions that we can discuss but there's always something we can put together and it's always to your benefit to do that um we'll talk about it a little bit later but there's always another alternative when it comes to buying a property whether it's in your name or your spouse's name but assuming that you're both together and then you separate eventually there can always be an agreement that can be put together to actually account for this sort of event now it's pretty awkward to do that but it's very smart because if you have any concern about it you'd want to do this before you actually do the closing and again i'll repeat that you want to do that after the closing when you actually close it's a lot harder to get anyone to agree to anything because it's a little bit different but i always recommend if you are worried about that you do want to put together a legal document to help you to try to protect your rights and what would happen if your you and your partner did not see eye to eye and had to end your relationship so just something to keep in mind another question that i get that i really enjoy um answering is i purchased a home with my boyfriend and if we break up i want to sell it but he doesn't so what happens okay so this scenario happens all the time and it's that's part of the reason why we actually take on these cases these are called partition actions these are basically cases that end up in court this is not something that is super concrete um that's going to happen to you but it's it's very it's very clear i mean the laws i should say is concrete on what would happen um it's called the partition so what we usually do is when that when we have a client whose significant other does not want to sell the home and assuming they are both owners of this home we actually have to open up what's called a partition action and this is essentially a lawsuit we have to actually sue the other person who owns the property to say hey you have to sell this because that's what the law says and we're going to get a judge involved now that's just kind of making it really simple i mean the process of a partition action can take time but it does come up because it's sometimes the only resort that we have left and it's not a bad um avenue to take if anything it will reach the um the outcome that the parties want assuming that the person that wants to sell you know still wants to sell but no one really has a right to say no you cannot sell this house because i said so it doesn't really work that way and so a partition action is typically what is what happens and what is filed once this takes place we handle these a lot and we do have a lot of experience in it so just so you're aware it is something that can be resolved but usually a judge has to be involved as part of the process so do not feel like because your boyfriend or girlfriend or your significant other doesn't want to sell that you're stuck i'm here to tell you that that's not true so make sure you educate yourself on your options you can always give us a call to try to figure out your options as well so another question i get every so often is if i am married and inherit property from my parents and we want to sell it uh but my spouse is entitled is my is my spouse entitled to half of the proceeds uh you know generally generally when we ask we talk about inheritances and all of that typically inheritances are considered out of the marriage they're pre-marital assets this just means that this is something that you were going to be getting anyway and it really wasn't part of the the marriage now i am not going to pretend i'm a divorce attorney because i'm not but typically when you talk about inheritances it really usually is considered separate so your spouse doesn't just get um get the proceeds so to speak but it really also depends how this money was used inheritance can be kind of tricky because sometimes what will happen is the heritage is used for something with your spouse and then the money is co-mingled is the word they use with your spouse's stuff so it really depends there's a fine line about what's considered marital property and what's considered non-marital property and uh speaking with a divorce attorney about this particular issue is always important before you just ask an estate planning or real estate attorney because where you're at and the in the circumstances around that really really depend so it's hard to say for for a fact how your scenario would play out but typically if it's an inheritance that is basically non-marital means it's not part of the marriage typically this is considered to be outside and so proceeds of whether your spouse would be entitled to really depends on what it is how it was received how it was used and all of that so that question is hard to answer but it's it's one that you definitely want to try to contact someone to help you because it's not easy to really decipher that based on the question so thank you for the question but it is one that i can't give a definite answer to until we kind of get more facts about it another question that i get is is there a way to protect me if i make more than my spouse and they cannot afford to make the homes maintenance costs well again kind of back to our our last question is this question really depends on whether or not you have an agreement before you buy the house and assuming that you are um and actually this this question talks about your spouse if your spouse and you're married this question actually alludes to the fact that you are married so can someone um should say be more protected than the other well when it becomes to marriage love has everything to do with it of course but the law actually sees a marriage as a unit it's together so um while we can maybe stipulate to certain things especially again if you've gotten married and you have a practical agreement for example this may answer your question or maybe it doesn't um there's so many there's so many factors that go into that question because um typically blanket statement is marriage is marriage and the law treats you as unified so what's his is yours what's hers is his and et cetera et cetera so even though we're saying you know you can maybe put up a prenup or you've done something before the marriage to kind of address this question generally if you're together and someone can afford the maintenance costs well you're you're married and you're both buying the property so i would say to you that you're not really going to be super protected because you're already married so you're really considered one unit what you really should be asking is how can i budget to make sure that we don't actually end up you know in a position that's bad for the marriage financially because that does impact um impacts you right but typically i would say when you're married it's completely different than an unmarried couple now if this question was asked um in another way you know how can i protect myself if my spouse isn't able to pay for the for the home um or my spouse loses their job or we break up or that sort of thing that has a little bit more leeway because again when you're unmarried and you buy property many times it looks like a partnership it's like a business arrangement that's how the law sees it they don't see whether or not you're with your partner or not with your partner so it's just kind of a agreement so to speak so there are ways to protect yourself especially if you don't want to end up having to litigate and bring a partition action against someone that's costly it's a headache but sometimes it's absolutely necessary but the point i'm trying to make is that you do have ways to protect yourself especially if you're concerned about your money your investment um especially when you're married or unmarried there are different options for couples there's so there's differences in the law depending on marriage or unmarried um because if you're a married couple you more are seen as a unit you're seen as one when you're not married the law really sees you as more like a business arrangement a partnership a contractual agreement and really um there is a way to protect you always i would say in both scenarios but one more than the other so i hope that that addresses the question and speaking of that um one of the things i wanted to address too is is when we talk about um loan options people will always think about whether or not to put the loan in their name or in their spouse's name or in maybe people that are unmarried put in one one or the other but typically when we talk about loan options um you have to see who qualifies what kind of rate you're getting so typically you talk to lenders about this they kind of guide you on what are the things that you qualify for when it comes to unmarried couples having there is a way by the way very important information i'm about to give you there is a way to add both of you as owners of the property but the mortgage only to be in one of the names i'll repeat that again there is a way to add both people that are unmarried onto the title of the property so that they're both owners you know in public record and all that you're both owners but the mortgage is only in one of your names and many times people do this for financial reasons maybe one person has better credit than the other maybe one person prefers to have it in their name not the other you can also have the mortgage in both of your names it just depends but the point i'm trying to make is there are different options when it comes from the lending side and your options as to who's whose name is better to have it on there is something that we certainly discuss with a lot of clients because we want to make sure that you understand your ability to get on a loan to not have to be in the loan and it really all just depends on your scenario so that's just something to keep in mind total side note on that same thing with the mortgage the mortgage when you're married you can also be in the loan together or maybe just one of you is on the loan but nonetheless there are different options when it comes to buying a property for married and unmarried couples another question i get often is can i hire a real estate attorney to review a deed um and actually maybe even the deal the deal to the contract before making up my offer to to buy a property uh yes absolutely many people actually come to us after it's signed because there is a time period at least in illinois for attorneys to review the contract it's about five days five business days i should say which is essentially a week from when the seller signs a contract so we do have a chance to review it after but if you are concerned and you're thinking man i really want to get someone to review this to make sure i understand what i'm signing and you don't have a full understanding what it is absolutely give us a call right away because there is nothing worse than signing something to find out you know you could have done more before and really our consultations are free so most times i'll tell a client yes we can absolutely help you before you put in an offer especially if you have reservations about what the contract says what it means you know and i had a client today remind me that while look there's a lot of the language in these contracts for buying a property or even selling a property is actually standard it may not be standard to you and that is okay that is what we're here for so if you are concerned about putting in an offer and it hasn't been reviewed by an attorney feel free to give us a call because i can definitely do that for you and that's not a problem we just want to make sure you're comfortable with what you're signing so yes it is always always an option you can always hire us before as opposed to after now another question that i get often is do we offer fixed retainers for our time or are we billed hourly for every single question now it depends on the case if we're talking real estate transactions which is what we've been talking about throughout typically it's a fixed fee it's one time flat fee uh that is one time payment you don't have to be charged per hour we don't have to like ask for a bigger retainer to charge hourly for that sort of thing now on the opposite side of this question i mentioned to you earlier and i hope you were listening about the partition action that actually goes before the court now those typically depending on your scenario they're not always fixed flat fees meaning you don't pay one time and then it's over and the reason for that is because when we do partition actions they can be quite um you know quite lengthy they're definitely not a month it could take a couple of months it can take more than a couple of months really depends because if we are dealing with real estate or maybe the one more more than one piece of real estate um this doesn't take you know a month or two months and we're also subject to the court it takes a while not everything is done so quickly especially during the pandemic so for those we usually ask for a retainer and then we bill you for our time because keep in mind the partition actions like any other case can be unpredictable it can be open-ended but absolutely necessary for your scenario so don't feel as though you can't ask us those questions during the consultation we definitely are very transparent about pricing and really give you a good estimate of what we think is going to happen especially in your scenario so always feel free to ask those questions for us another thing we get asked about is do we offer virtual or on-site appointments yes we always are offering virtual appointments for anyone that does not feel like leaving their house or isn't able to these are free we just do them virtually you can do it from the comfort of your own home and what's better than that also if you want to come in person we woke up the opportunity to meet you we are wearing masks we have the sanitizer so it is pretty pretty more personable if you're looking for that so we're absolutely able to help with that um another thing i wanted to mention that um it's really part of this conversation is when you talk about buying property together you know i'm going to tell you about estate planning because estate planning is always the really the glue that holds a lot of your assets together especially if something happens to you now particularly i want to talk about individuals that are unmarried first now we talked a lot about real estate we talked about what happens if we split up what happens if you know this happens but one of the questions that i get often when it comes to unmarried couples is what happens if my partner dies um what happens if um the house is only in his or her name and not in my name and then they pass away that sort of thing uh these are very very very important questions and the fact that i get asked this makes me always want to address it during my pink mic because these questions are ones that we don't want to talk about we don't actually think about them but for me i actually see this really often and often enough that i tell people when i'm doing a transaction if i know that they're buying it um without being married we definitely want to discuss the options now we always talk about having a will having a trust in place living trusts depending on your scenario we may go that route and that's really how we can protect the property if you or your significant other were to pass away because keep in mind what i said earlier in illinois the courts they see you um when you're unmarried as two individuals um in a really a partnership a business arrangement a contract so if one of one of the people that passed away it happens to be the owner and the significant other is not the owner of the property that could be really problematic and the reason is because assuming that person died without an estate plan it could end up before the court and have to open a probate estate and quite frankly you may not even be considered an heir because you weren't married so the court really considers unmarried couples in another category and i would argue we say have less rights so to speak than a married couple does and that's a very big distinction now i'm not telling you guys to go and get married to have more rights but i am saying if you are choosing to buy property or do things financial um investments with other individuals that are not your family members or significant others you certainly want to put together an estate plan to make sure your assets are protected and really it just creates a better protection for your legacy so estate planning it has everything to do with real estate i always tell you guys this but particularly when it comes to individuals that are buying properties together that don't have a marriage in between so it's just really important for everyone to know that so i just wanted to kind of touch base on that and that really could be a whole segment in itself but i figured i should sprinkle it in in case you're wondering so where can you contact me if you want to get in contact with us well you always know my number i always have it at the bottom of the screen uh we also have a text line it's the same number as you see below if you want to text us you certainly can consultations are free they are in english we have spanish as well i speak spanish and so does my staff so we can always help address those questions as well now i always want to thank you all for watching because i really appreciate the support and the questions that we get throughout the process of pink mic so i really appreciate everyone watching and thank you so much for your excellent questions with the craziness of the real estate market you can actually it's going to only get crazier i strongly strongly encourage you to hire a reputable attorney especially with someone that knows real estate that really understands what it's like to work with couples that have different rights and really understands even what happens when you don't have something in place um like i mentioned partition actions are something we assist with but we also want to try to avoid those actions so buying and selling is super super important for you to have the right legal guidance so please make sure you understand by watching this video the differences between married and unmarried couples when it comes to real estate in your assets so i always invite you here to watch pink mic legal confessions on at one o'clock on tuesdays and feel free to always share these videos with your loved ones to see how we can help them as well so thank you so much for your time and we will see you next week