When two married individuals decide to own property together, they will need to decide how to divide the ownership of that property. In many cases, this decision is made easy by the fact that both spouses will contribute to the purchase of the property with their respective incomes. However, there are situations in which only one spouse has the financial means to contribute, and the other spouse will not be contributing monetarily to the purchase.
In such instances, a non-purchasing spouse agreement can come in handy. This is a legal document that outlines the rights and responsibilities of the non-purchasing spouse regarding the property. It is important to note that this agreement does not give the non-purchasing spouse any ownership rights in the property.
What is a non-purchasing spouse?
First and foremost, let’s define what a non-purchasing spouse is. Essentially, a non-purchasing spouse is a person who is married to the individual who is buying the property, but they are not contributing financially to the purchase.
For example, suppose a husband is purchasing a home using his personal savings and has no intention of involving his wife financially. In that case, his wife would be considered a non-purchasing spouse.
Why do you need a non-purchasing spouse agreement?
There are several reasons why a non-purchasing spouse agreement may be necessary. First, it provides legal protection for both spouses. The agreement outlines the rights and responsibilities of the non-purchasing spouse, which can help prevent confusion and disagreements down the road.
Additionally, a non-purchasing spouse agreement can help protect the purchasing spouse’s assets in the event of a divorce. If the couple separates, the non-purchasing spouse may try to claim ownership of the property, especially if they have contributed to the upkeep, mortgage, or improvements of the property. A non-purchasing spouse agreement will prevent this from happening.
What should be included in a non-purchasing spouse agreement?
There are several key elements that should be included in a non-purchasing spouse agreement. These include:
1. The property`s ownership: The agreement should state that the purchasing spouse is the sole owner of the property and that the non-purchasing spouse does not have any ownership rights.
2. Payment of expenses: The agreement should outline which spouse will be responsible for paying the mortgage, property taxes, insurance, and any other expenses related to the property.
3. Maintenance responsibilities: The agreement should make it clear who is responsible for maintaining the property, including repairs and upkeep.
4. Liability: The agreement should state that the non-purchasing spouse will not be liable for any accidents or injuries that occur on the property.
5. Termination: The agreement should outline how it can be terminated and under what circumstances.
When should a non-purchasing spouse agreement be drafted?
A non-purchasing spouse agreement should be drafted before the property is purchased. Ideally, this agreement should be discussed and signed before the property is even listed. However, it is not too late to draft a non-purchasing spouse agreement even if the property has already been purchased.
A non-purchasing spouse agreement can be a valuable tool for couples who are buying a property. It is essential to draft this agreement before purchasing, as it can prevent confusion and disagreements down the road. By clearly outlining the rights and responsibilities of the non-purchasing spouse, this agreement can provide legal protection for both spouses and help prevent costly legal battles in the future.