‘What could possibly go wrong? Yikes, a little ‘: Zooey Deschanel’s latest home purchase could be a risky bet – here’s why
Zooey Deschanel and her HGTV star boyfriend Jonathan Scott revealed this week that they bought the house of his dreams in Los Angeles.
For unmarried couples, buying a house together can become a nightmare if they don’t take the right steps to protect themselves financially and legally.
In an extract from the magazine Jonathan Scott shares with his twin brother Drew, the “Property Brothers” star detailed the journey he and Deschanel took to buy a home together. Scott described his girlfriend as a real estate enthusiast, describing her as “one of those ‘Friday Night Zillow’ guys.”
“We both cherish old homes – the intricate details, the wood floors, the vintage hardware,” Scott writes. “We love a house that feels special and loved, with its own unique history.
“Zooey Deschanel bought a Georgian-style home in Los Angeles with her boyfriend, HGTV star Jonathan Scott.“
An early search for a potential home to share only revealed two properties that met the couple’s criteria – and they ended up buying one, although they essentially started the search on a whim. The property in question, a Georgian-style house designed in 1938, was in need of extensive renovations, which the couple plan to detail in future issues of the magazine.
In addition to fixing structural issues, including bringing the home into compliance with the California seismic code, the couple also sought to make it an eco-friendly abode. Scott said the house does not depend on fossil fuels for heating or cooling and uses state-of-the-art insulation.
While Deschanel and Scott may still be in the honeymoon phase, dreaming about their future in the home, financial experts have warned that unmarried couples should approach joint home ownership with care.
“What could possibly go wrong? Ouch, a little,” said Thomas F. Scanlon, a Manchester, Conn-based certified financial planner and accountant.
(A representative for Deschanel declined to comment, while Scott’s reps did not return requests for comment.)
The law is not on your side
Property laws in most parts of the country are designed for married couples, financial and legal experts have warned. For unmarried partners who choose to purchase joint property, this can leave them without a vital safety net.
“Most states have some form of ‘homestead laws’ that automatically protect spouses from the unwanted consequences of a spouse’s death,” said Austin Frye, an attorney who practices estate law and president and founder of the Frye Financial Center in Aventura, Florida. “These protections are generally not extended to unmarried couples.”
These laws, Frye said, will allow a widow or widower to continue living in the property for the rest of their life, even if the title was in their late spouse’s name, as title automatically passes to the surviving spouse.
““If the relationship breaks down, neither party has financial or legal protection.”“
Likewise, if a couple separate, the laws surrounding divorce make it easier to dissolve the property. In most states, property acquired during marriage is divided equally, while in “communal property” states, property acquired during marriage is generally divided into two if it is a shared property.
For unmarried couples, “if the relationship breaks down, neither party has financial or legal protection regarding the money and assets that each puts into the house during the purchase and during the relationship”, said Sallie Mullins Thompson, Washington-based financial planner and tax strategist. , CC
How unmarried couples can protect themselves – and their investment
Long-term planning is essential to ensure that each partner – and their heirs – are protected in these agreements, experts argued.
“Before you make the purchase, plan what you would like to happen if unexpected things happen,” suggested Linda Farinola, president of New Jersey-based Princeton Financial Group.
For starters, experts have recommended that unmarried couples write a document similar to a prenuptial agreement, sometimes referred to as a cohabitation or condominium agreement. Not only would such a document explain how the property would be divided in the event of a breakdown, it could even cover more mundane topics such as expectations about who pays for maintenance. Such a deal would hopefully save an unmarried couple a big legal battle down the road.
“The way the title to the house is held can make it harder to see what happens to the house if one of the partners dies.“
Another consideration here is end-of-life planning. Depending on the form of the deed with which the property is held, it may not pass directly to the surviving partner in the event of death. In such a scenario, other heirs could be entitled to this share of the house. Unmarried couples can avoid such embarrassment by dictating that the surviving partner would inherit the share upon their death, rather than another person.
The form the title takes and the way it is held can also be particularly important for unmarried couples. A preferable option, Farinola said, might be to own the property as common tenants, since each person would have a 50% stake. But other options are possible, she said, such as owning the home through an LLC that has an operating agreement or through a trust.
“In that case, the parties can organize at the start how things should be divided in different scenarios,” Farinola said. “The downside is that it makes things more complicated.”