Sometimes clients who mediate a prenuptial agreement have questions later about how to title a new residence. Every prenuptial agreement, situation, and family is different, but some general observations might be helpful. 

Most prenuptial agreements will control the issue of how the property is allocated at time of legal separation or divorce, no matter how it is titled. But since title issues aren’t just about divorce, and have other considerations as well, title should be discussed with a real estate advisor or perhaps an estate planning attorney (for example, to discuss how the property should be passed on to future generations, if parties don’t divorce)

A common scenario might be that one spouse wants the down payment to remain her separate property (in the event of legal separation or divorce). If so, it’s best if those down payment funds come directly from her separately titled account. If the down payment is being gifted to her from her family, nothing about that gift or the associated money transfer should include the other spouse’s name or go through joint accounts.

Identifying ownership percentages (which spouses can generally do on the title deed, whether they are going to be “tenants in common” or “joint tenants”) may be helpful in clarifying what each spouse will keep separately, and can make the prenuptial agreement easier to apply in the event that becomes necessary. 

Example 1

If the understanding is that the wife who is making a down payment of one-third of the purchase price will own that portion of the overall value going forward as “separate” property, and that the spouses will co-own (50% each) the remainder as “marital,” I might suggest they identify ownership in the title deed as two-thirds owned by wife and one-third owned by husband. If they want to co-own the marital two-thirds in non-equal portions, then they would probably want to negotiate and identify the specific proportion of ownership.

Example 2

If one is paying the entire monthly mortgage payment going forward, that party might own 100% of the marital two-thirds. If spouses don’t identify any proportion in the title deed, as joint tenants the default is equal ownership

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John Hoelle is Co-Founder of Conscious Family™ Law & Mediation, offering collaborative divorce mediation, or legal representation with strength and integrity, in metro Denver/Boulder, Colorado.