Legal Question in Real Estate Law in California

Re: not married: how best to take title in los angeles

This is a very complicated question with many possibilities as answers. Quite honestly, anyone here will give you a number of possibilities but none will really be sufficient unless you consult directly with an attorney in person who can ask all the "right" questions. With this much money at stake and all the complications you really need a sit down talk. There are too many facts missing for a concise response. FYI - and really this is not to make any attorney's fees - but to protect your investment and intentions. Sounds like a contract and/or pre-marital agreement is in order to preserve your intentions but really this can vary dependent on the facts. Botton line is do not buy/take title without consulting with an attorney directly - my first choice would be an attorney with family law and probate experience in your area. Please do not let this stop you from asking questions of anyone here though - but with the facts presented all we can do is speculate and you do not need speculation with this much at stake. Feel free to e-mail me - LA is a BIG county and your post does not indicate where you are.

Best wishes

Re: not married: how best to take title in los angeles

I'll start off by saying that conventional wisdom in your and similar situations is to hold title as tenants on common. This allows each of you to deal with inheritance issues for your half interests entirely separately. You can even put your half interest in your trust.

You can deal with the possible early death of one or the other of you by giving each other life estates in your half interests. That way, nobody inherits a possessory interest until both of you are gone, giving the survivor continued use of the home.

A likely complicating factor here is whether a lender will find the co-ownership acceptable when one proposed co-owner has bad credit. My understanding is that lenders are likely to require that you be the only one on title.

Also, my understanding of tax law, which is limited to be sure, is that the deduction can only be taken by the one obligated to pay the property tax or the mortgage interest. If you are both equally obligated, I think you have to share the deductions, and if you are the only borrower and/or the only person on title, I think he may not be entitled to the deductions. This is only a "heads up," based on my recollection of the law when I researched it a couple years ago, and I'm not at all sure.

A further observation is that when X and Y share legal title, but X put up 100% of the down payment, and there is no agreement to the contrary and no evidence of a gift, Y may be held to hold his or her 50% of title as an involuntary trustee for X. The payment of the purchase money raises a rebuttable presumption that the person paying was really intended to get the portion of title represented by that payment, and the person who got a disproportionate piece of title was not intended to have it, and must convey to the other upon demand. This is called a "purchase-money resulting trust." In order to prevent one, and for other good reasons as well, your boyfriend should want a well-written contract to protect him from the possibility that your position will become legally dominant - paying the bills is a lot harder to argue in court as a basis for property rights in comparison with being on title, being the borrower, etc. Of course, a well-written contract would protect both of you by minimizing the long-run chances for strife and misunderstanding.

Finally, I think an experienced drafter of trusts could embody all of what you want to happen into a trust, possibly an irrevocable trust, with tax, probate, survival, inheritance, credit, title etc. issues all handled in one neat package - but you can't just use a boilerplate living trust. For this reason, I think the legal specialty you two should seek out is a very experienced estate planner.