Can 2 people have unequal ownerships together?

[Subjection1]

Can 2 people have unequal ownerships in a home?

What is the name of your state (only U.S. law)? WI

My Dad and I have lived apart for decades, and now we were both thinking of making a move, preferably to a home in a rural area. I came up with an idea that maybe we could live together and pool the money from the sale of each of our homes into one. His current home would probably sell for around $150,000 and mine would probably go for $50,000 or maybe $60,000. Mine is pretty old.

So we could put our money together and maybe get a house for $200,000. But if my Dad is paying 3/4 of the cost and I'm paying 1/4, is there a way to legally put both of our names on the title but not having it be a half and half ownership? The reason for such a distinction would be in case I decided to move out later and my Dad bought out my share.

 

[FlyingRon]

You can have the property deeded in unequal shares when you are tenants in common. Joint tenancy requires equal interests in Wisconsin (and nearly everywhere else).
If you don't specifically mention the unequal shares in the deed however, you're presumed to own it equally. It probably behooves the two of you to have a lawyer involved in this.

Note that it may be a bad deal for dad as well if you intend to finance the property. Even if he puts in cash for his share, the lender you wish to use is almost certainly going to insist that all owners be subject to the loan. (Not a law, but I've never seen one not require it). That will make him responsible if you don't pay (and in fact, unless he wants to see his interest foreclosed upon, he'd need to make sure it gets paid anyhow).

 

[Subjection1]

You can have the property deeded in unequal shares when you are tenants in common. Joint tenancy requires equal interests in Wisconsin (and nearly everywhere else).
If you don't specifically mention the unequal shares in the deed however, you're presumed to own it equally. It probably behooves the two of you to have a lawyer involved in this.

Note that it may be a bad deal for dad as well if you intend to finance the property. Even if he puts in cash for his share, the lender you wish to use is almost certainly going to insist that all owners be subject to the loan. (Not a law, but I've never seen one not require it). That will make him responsible if you don't pay (and in fact, unless he wants to see his interest foreclosed upon, he'd need to make sure it gets paid anyhow).

We'd both be paying cash since both of our homes are paid off.
Interestingly, my question arises because of how I bought my current home. My Dad is where I got the money to buy my home, and I paid him back over time. The way he protected himself was to list both of our names on my title as joint tenants. I guess that was a mistake because when I paid off the house, I wanted to take my Dad's name off of it, but then found that doing so would mean having to pay a gift tax because it would be legally assumed that my Dad just gave me half of the house, even though I have all the receipts for the 8 years of payments I made to him.

Now that I think about it, there might be other factors to consider as well, such as the home insurance. If a fire burned the place down, it would have to be known who gets what part of the settlement. There might be other things too that I'm not considering.

 

[Zigner]

What makes you think there would have been any gift tax due?

 

[Subjection1]

What makes you think there would have been any gift tax due?

I consulted with an attorney about it. Before that, I asked about it here. I was told that we should have had it recorded at the beginning that payments were going to be made in order to eliminate the gift tax.

 

[adjusterjack]

We'd both be paying cash since both of our homes are paid off.
Interestingly, my question arises because of how I bought my current home. My Dad is where I got the money to buy my home, and I paid him back over time. The way he protected himself was to list both of our names on my title as joint tenants. I guess that was a mistake because when I paid off the house, I wanted to take my Dad's name off of it, but then found that doing so would mean having to pay a gift tax because it would be legally assumed that my Dad just gave me half of the house, even though I have all the receipts for the 8 years of payments I made to him.

Well, I don't know where you found that out from but unless your Dad was giving away well over $5,000,000 in his lifetime there would have been no federal gift tax payable.

That's one illustration of the mistakes you can make by not getting the right professionals to guide you through this.

As a matter of fact, he didn't have to be on the deed to protect his interest, he could have just had you sign a mortgage in his favor for the money he loaned you.

Now that I think about it, there might be other factors to consider as well, such as the home insurance. If a fire burned the place down, it would have to be known who gets what part of the settlement.

Speaking as a former claims adjuster who is well versed in insurance industry practices one claim check would be issued in the names of both Named Insureds regardless of what the deed said. Then you would have to figure out who got what when you cashed it.

There might be other things too that I'm not considering.

I'm sure there are. That's why you need to be talking to a lawyer and a tax pro.

 

[Zigner]

I don't see any questions from you about this matter.

 

[LdiJ]

We'd both be paying cash since both of our homes are paid off.
Interestingly, my question arises because of how I bought my current home. My Dad is where I got the money to buy my home, and I paid him back over time. The way he protected himself was to list both of our names on my title as joint tenants. I guess that was a mistake because when I paid off the house, I wanted to take my Dad's name off of it, but then found that doing so would mean having to pay a gift tax because it would be legally assumed that my Dad just gave me half of the house, even though I have all the receipts for the 8 years of payments I made to him.

Now that I think about it, there might be other factors to consider as well, such as the home insurance. If a fire burned the place down, it would have to be known who gets what part of the settlement. There might be other things too that I'm not considering.

There would not have been any actual gift tax due, although you might have had to file a gift tax return. A person does not have to pay any gift tax unless they exceed their lifetime limit for gifting, and that is currently over 5 million.

Home owner's insurance would be an issue on a home that had no mortgage.

 

[Subjection1]

There would not have been any actual gift tax due, although you might have had to file a gift tax return. A person does not have to pay any gift tax unless they exceed their lifetime limit for gifting, and that is currently over 5 million.

Home owner's insurance would be an issue on a home that had no mortgage.

That 5 million figure relates to estate taxes rather than gift taxes. The gift tax starts out at $14,000 at the current time.

 

[Subjection1]

I don't see any questions from you about this matter.

The question was in my OP: In the title and also in the second sentence of the second paragraph.

 

[Zigner]

That 5 million figure relates to estate taxes rather than gift taxes. The gift tax starts out at $14,000 at the current time.

No, you misunderstand.
A person is allowed to give away "gifts" (whether during his/her lifetime or through their will) of up to $5 million before any tax is due. The $14,000 is merely the current yearly threshold after which the gifts must be reported. Simply reporting the gift does not mean that tax is due.

 

[Subjection1]

No, you misunderstand.
A person is allowed to give away "gifts" (whether during his/her lifetime or through their will) of up to $5 million before any tax is due. The $14,000 is merely the current yearly threshold after which the gifts must be reported. Simply reporting the gift does not mean that tax is due.

I tried posting a new thread with a new question, but was instructed to ask the new question in the current thread. Here it is:

I'm currently on SSI and SSDI disability and own my home. My Dad also owns his own home. We have been thinking of selling both of our homes and combining our money from the sales to get a better home together. A house we found seems perfect for us. It has the main house level, and then it has a lower level that accessible by simply walking down a flight of stairs. The lower level has its own kitchen, living room, full bathroom and bedroom. So, we were thinking that my Dad would live upstairs and I would live downstairs, and that way we would sort of still have our independence, although we'd still spend time together.

Now, I have to consider how this arrangement might affect my benefits. My Dad told me of someone else who is on SSI and lives in a similar situation with her parents, and said she had to do it that way in order to not have her benefits affected. I'm not sure of the particulars of her situation though. The house my Dad and I are considering is a single house, and not a house with a rental unit attached with a separate address. So in the eyes of the government, we'd be living together.

Also of importance, the house is around $200,000. The sale of my Dad's current house would be able to fund about 2/3 of the new house, and mine would fund 1/3. We were going to put both our names on the title, with mine being for 1/3 of ownership, so I'd be paying 1/3 of the property taxes, insurance, and utilities.

Here's what I found so far by doing my own research: https://www.ssa.gov/ssi/spotlights/spot-living-arrangements.htm

The third item down addresses what happens if someone is "helping me pay my shelter costs". But does this apply to our situation?

 

[LdiJ]

I tried posting a new thread with a new question, but was instructed to ask the new question in the current thread. Here it is:

I'm currently on SSI and SSDI disability and own my home. My Dad also owns his own home. We have been thinking of selling both of our homes and combining our money from the sales to get a better home together. A house we found seems perfect for us. It has the main house level, and then it has a lower level that accessible by simply walking down a flight of stairs. The lower level has its own kitchen, living room, full bathroom and bedroom. So, we were thinking that my Dad would live upstairs and I would live downstairs, and that way we would sort of still have our independence, although we'd still spend time together.

Now, I have to consider how this arrangement might affect my benefits. My Dad told me of someone else who is on SSI and lives in a similar situation with her parents, and said she had to do it that way in order to not have her benefits affected. I'm not sure of the particulars of her situation though. The house my Dad and I are considering is a single house, and not a house with a rental unit attached with a separate address. So in the eyes of the government, we'd be living together.

Also of importance, the house is around $200,000. The sale of my Dad's current house would be able to fund about 2/3 of the new house, and mine would fund 1/3. We were going to put both our names on the title, with mine being for 1/3 of ownership, so I'd be paying 1/3 of the property taxes, insurance, and utilities.

Here's what I found so far by doing my own research: https://www.ssa.gov/ssi/spotlights/spot-living-arrangements.htm

The third item down addresses what happens if someone is "helping me pay my shelter costs". But does this apply to our situation?

No, because each of you are paying your own shelter costs.

 

[Subjection1]

No, because each of you are paying your own shelter costs.

Even though I'd only be paying 1/3 of each bill's total?

 

[Zigner]

No, because each of you are paying your own shelter costs.

From what the OP posted, about 13.3% of his "shelter costs" will be shouldered by dad. Furthermore, the OP would need to show that he's actually not sharing the day-to-day expenses (ie: food, etc).