Author: Richmond Cariaga

Rising housing costs, the desire for companionship, and the need to share resources are increasingly leading buyers to consider co-owning a home with someone other than a spouse, such as a friend, relative, or significant other.

Although this arrangement can be beneficial on several levels, it should be approached with open communication, careful planning, and a clear understanding of the financial and legal implications.

Co-Ownership on the Rise

Whether the reason for home co-ownership is affordability, companionship, shared responsibilities, investment opportunity, or some mix of these, the numbers tell the story of how nonspouse co-ownership is increasing.

Data from Zillow shows that 62 percent of buyers share ownership of their home with at least one other person, but just 50 percent co-bought with a partner or spouse.^[1] Fourteen percent co-bought a home with a friend, and 12 percent co-bought with a relative.^[2] Affordability was a top reason cited for buying a home together.^[3]

Co-Ownership Challenges and Legal Considerations

While co-ownership offers many benefits, it also comes with potential challenges.

Even the strongest relationships can be strained by the pressures of shared living and financial responsibilities. In addition to disagreements over lifestyle choices, finances, and property maintenance that may arise in a co-ownership situation, owning a home with a nonspouse can raise legal issues.

Expectations should be set from the start of the co-owning relationship—ideally, in a written agreement—and regularly communicated throughout it. To ensure a successful co-ownership experience, it is essential to have open and honest discussions with your potential co-owner(s) about the following:

• Financial contributions. How will the down payment, mortgage, taxes, insurance, and maintenance costs be divided? Will there be a joint account for these expenses? What will happen if one person cannot meet their financial obligations?
• Exit strategy. What happens if one co-owner wants to sell their share of the property? Will the other owner(s) have a right of first refusal? How will the property be valued?
• Death or incapacity. How will the property be handled if one co-owner dies or becomes incapacitated (unable to manage their affairs)? Does the ownership structure align with each co-owner’s estate plan goals?
• Usage and responsibilities. What is the property’s intended use? Will it be a primary residence, a vacation home, or an investment property? How will household chores, maintenance, and repairs be divided?
• Dispute resolution. What mechanisms will be in place to resolve disagreements or conflicts?

How to Address Potential Co-Ownership Issues

The deed to a property is a legal document that can be instrumental in addressing possible legal and other issues in a co-ownership scenario. It names the co-owners and how they hold title to the property, but it might not address more complex co-ownership issues, such as rights and responsibilities for maintenance costs, how decisions about the property will be made, and a dispute resolution process.

A deed, combined with a more comprehensive co-ownership agreement, should be written to mitigate foreseeable conflicts and protect your interests. The agreement should also be reviewed frequently and updated whenever a co-owner’s circumstances change.

Establishing Ownership Structure

Before buying a home with someone other than a spouse, understanding your options for joint ownership is important. The rules can vary by state, so consulting an experienced attorney can help you make the best choice for your situation. Once selected, the ownership structure needs to be reflected on the property deed.

• Joint tenancy with rights of survivorship. Under joint tenancy, each co-owner has an equal and undivided interest in the property. Upon the death of one owner, their share automatically passes to the surviving owner. This arrangement is common among married couples and close family members.
• Tenancy in common. Each co-owner in a tenancy in common holds a certain share of the property, which can be equal or unequal. If the deed does not specify percentages, the co-owners are considered to have equal ownership. When one owner dies, their share passes to their beneficiaries based on their will or to their family members according to state intestacy laws. Tenancy in common offers more flexibility, in particular for co-owners who are not spouses or close relatives, such as two families purchasing a second home together.

Defining Responsibilities and Rights

Clearly defining each owner’s rights and responsibilities is crucial to avoid future conflicts and ensure smooth property management.

• Financial obligations. To avoid disputes over who pays for what, a co-ownership agreement should outline each co-owner’s financial responsibilities, such as contributions to mortgage payments, property taxes, insurance, and maintenance costs.
• Usage and access. If the property is a vacation home or investment property, the agreement can specify how the co-owners will share usage and access. Points to address include scheduling, allocation of time, and rules regarding guests.
• Maintenance and repairs. The agreement may outline division and management of maintenance and repair responsibilities. Each co-owner can be assigned specific tasks, and the agreement can establish a joint fund for these expenses.

Addressing Potential Conflicts

A strong co-ownership agreement should also outline how to resolve disputes.

• Dispute resolution. A dispute resolution clause can require the co-owners to attempt mediation or arbitration to resolve disputes before resorting to contentious and costly litigation.
• Buyout provisions. The agreement can outline a process for one co-owner to buy out the other’s share if the other owner wishes to exit the co-ownership arrangement. Key terms to include in a buyout provision are right of first refusal, valuation methods, and payment terms.
• Sale or transfer of ownership. Conditions for selling the property, such as requiring unanimous consent from the co-owners or establishing a process for handling disagreements about selling, are best addressed before purchasing the home.

Protecting Individual Interests

Consider adding provisions to your co-ownership agreement that safeguard each person’s individual interests.

• Liens and encumbrances. The agreement should clearly state that each co-owner is responsible for their own debts and that the ownership interest of one co-owner cannot be used as collateral for the other co-owner’s individual loans. This provision helps to protect co-owners from being held liable for others’ financial obligations.
• Partition action. In cases where co-owners cannot agree on major decisions (e.g., selling the property), the agreement can contain a provision allowing for a partition action, a legal process that allows the court to divide the property or order its sale, providing a resolution when co-owners reach an impasse.

After a deed has been recorded, it cannot be easily changed. To change the contents (e.g., names, ownership structure, ownership percentage) of the original deed, it is necessary to prepare and record a new deed, which requires the consent of all parties involved.

Home Co-Ownership and Estate Planning

Estate planning takes on added importance when you buy a home. Your estate plan should take the long view on homeownership and address the following points:

• If you own the property as tenants in common, your will should explicitly state who inherits your share of the property. You should also discuss with your co-owner to whom their share of the property will pass at their death.
• In the case of joint tenancy with rights of survivorship, your share automatically transfers to the surviving co-owner. However, it is still advisable to address the property in your will and clarify your intentions in case of simultaneous death or other unforeseen circumstances.
• Placing your interest in the property in a trust can avoid the court process known as probate, create a smoother transfer of ownership, and allow greater control over how the property is handled after your death. You can specify conditions in your trust, such as requiring the surviving co-owner to buy out your share from the trust or dictating how the property should be used or managed.
• Your estate plan can include provisions to address potential disputes among co-owners after your death. For example, you could designate a neutral third party to mediate disagreements or outline a process for selling the property if co-owners cannot reach an agreement.
• If you own the property as tenants in common and leave your share to multiple beneficiaries, your estate plan should describe how that share will be divided or managed to avoid conflicts among your beneficiaries.
• Life insurance can give financial security to your co-owner in the event of your death. The death benefit can be used to cover your share of the mortgage, buy out your share of the property, or serve as a source of income or collateral for a loan.
• Discuss your estate plans with your co-owner so they understand your wishes and you can coordinate your plans as much as possible to prevent surprises and minimize potential conflicts after your death or incapacity. Regularly review and update your estate plan, especially after major life events or changes in your co-ownership agreement.

Homeownership continues to be a key component of the American dream, but it can become more complicated when you own a home with someone other than a spouse. Addressing co-owned property in legal documents removes as much risk as possible from the homebuying equation and sets the stage for a partnership that can benefit you now and your beneficiaries later.

Get in touch with our legal team to discuss how we can help you realize the dream of homeownership.

1. Manny Garcia, Buyers: Results from the Zillow Consumer Housing Trends Report 2023, Zillow (Aug. 23, 2023), https://www.zillow.com/research/buyers-housing-trends-report-2023-32978. ↩︎
2. Id. ↩︎
3. Id. ↩︎

Planning for the future of your home can be complicated, especially when you want to ensure that a loved one can continue living there after you are gone. Two common tools for accomplishing this are life estates and right of occupancy trusts. A life estate grants someone the legal right to live in a home for the rest of their life; however, while they can reside there, they do not own it outright. A right of occupancy trust allows someone to stay in the home under specific conditions set in a trust, giving more flexibility and control over how long they can remain. There are a few common scenarios in which people may use one of these tools.

As part of the greatest wealth transfer in modern history that is now underway, many younger Americans will inherit a home from their parents. This generational transfer is happening at a time when older Americans are living longer than ever. Many want to remain in their homes for as long as possible and transfer their home to a chosen loved one after their death, driving the need for estate planning tools such as life estates and right of occupancy trusts.

Both tools can help seniors age in place while facilitating the eventual transfer of their home to their children and other loved ones. However, there are key differences that can significantly impact an individual’s estate plan, loved ones, and remaining years. These tools are also common among blended families. With people marrying later in life or for a second or third time, it is possible that the home where the couple resides was originally the home of one of the spouses. Determining what happens if the home-owning spouse passes away first can bring about issues that need to be addressed through tools such as life estates and right of occupancy trusts.

What Is a Life Estate?

A life estate grants someone the right to possess and use a property for their lifetime. This person is known as the life tenant.

The life tenant has full use of the property and can even profit from it (e.g., by renting it out). However, their ownership is limited to their lifespan. When the life tenant dies, the property automatically passes to the designated remainderman (another word for beneficiary), who has a future interest in the property when the life tenant is alive that converts to a full ownership interest when the life tenant passes away.

A life estate is most often used when an owner wants to transfer property to a designated beneficiary (such as a child) while retaining the right to live in the property for the rest of their life. This allows the owner to stay in their home until they die and then have the property automatically pass to their chosen beneficiary without going through probate court.

For example, a life estate can be used in an estate plan to ensure that a caregiver, such as an adult child (the remainderman), has the right to inherit the property after providing care to an elderly parent (the life tenant). In this scenario, the caregiver lives in the home while the parent is still alive, with full ownership transferring to the caregiver child upon the parent’s death. A life estate can thus be a way to incentivize and compensate the caregiver for their services. 

For married couples in which one spouse owns the home, a life estate ensures that the surviving spouse (the life tenant) can live in and use the home for the rest of their life. After the life tenant passes away, ownership of the home automatically transfers to the person or people chosen by the first spouse to pass away (which may be other family members or children from a prior relationship).

As both the life tenant and the remainderman have an ownership interest in the property, major decisions about the property, such as a decision to sell or mortgage, typically require both parties to agree.

What Is a Right of Occupancy Trust?

A right of occupancy trust is a legal tool that allows a designated individual to live in a property for a specified period of time, usually until they die or move away, giving them the right to occupy the property without full ownership. It is similar to a life estate; however, the beneficiary is not allowed to sell or transfer their interest in the property the way a life estate beneficiary can. They have a right to occupy, but they do not have an ownership interest.

The trust can outline the terms of occupancy, including defining responsibilities for expenses such as property taxes, insurance, and maintenance. It can also provide money to pay for property-related expenses. Upon the right of occupancy trust’s termination, the property is distributed according to the trust’s terms.

A right of occupancy trust is generally used when the current owner wants to provide for someone’s housing needs while retaining control over the property, wants to ensure that the property is passed down according to their wishes after a specified event or period, or needs the flexibility to address specific beneficiary needs.

A right of occupancy trust can ensure that a caregiver, such as an adult child or a hired aide, can continue living in the home for a set period after the aging parent passes away. This provides stability for the caregiver while preserving the home’s ultimate inheritance for the parent’s chosen beneficiaries.

In the context of marriage, if the spouse who owns the home passes away first, a right of occupancy trust can allow the surviving spouse to live in the home for a set period or under specific conditions, such as until they remarry or move out. This ensures that the surviving spouse has housing security while also protecting the home for eventual inheritance by the original owner’s chosen beneficiaries, such as children from a previous marriage.

Key Considerations: Life Estate versus Right of Occupancy Trust

Both life estates and right of occupancy trusts have a great deal to offer in terms of estate planning. They appear quite similar on the surface and offer some of the same benefits, but they have important differences. Here are some key things to consider as you weigh your options:

1. Probate Avoidance

• Life estate. When the life tenant dies, the property automatically passes to the remainderman (i.e., the beneficiary), so it does not need to go through the probate court process.
• Right of occupancy trust. Because the property is owned by the trust, it is not subject to probate when the original owner dies. When the owner dies, the beneficiary gets the right to occupy the property, and when the beneficiary dies or ceases to use the property, the trust determines what happens to the property.

2. Control over Property Distribution

• Life estate. The life tenant can live in and use the property as they see fit during their lifetime, but they cannot sell or mortgage the property without the remainderman’s consent.
• Right of occupancy trust. The beneficiary of a right of occupancy trust has a right to occupy the property during the stated time period but is limited in what they can do with it. The trustmaker can set specific conditions, such as requiring the occupant to maintain the property or pay certain expenses. The beneficiary of a right of occupancy trust generally cannot sell or mortgage the property unless the terms of the trust provide otherwise.

3. Ownership and Control

• Life estate. The life tenant can sell their life estate interest (not the entire property), and the buyer would be subject to the life tenant’s rights. Therefore, when the original life tenant dies, the buyer’s rights end. However, if both the remainderman and the life tenant agree, the entire property could potentially be sold: The life tenant would be entitled to a percentage of ownership interest based on their life expectancy, and the remainderman would receive the remaining interest.
• Right of occupancy trust. The trust owns the property, and the beneficiary has only the right to occupy it according to the trust terms. This arrangement provides greater control and prevents the beneficiary from selling their interest.

4. Financial Responsibilities

• Life estate. The life tenant is typically responsible for most property-related expenses, including property taxes, insurance, maintenance, and minor repairs. The remainderman is usually responsible for major and structural repairs and long-term improvements. This allocation of financial responsibilities may be negotiated.
• Right of occupancy trust. The trust document can specify who is responsible for various expenses.

5. Property Tax Implications

• Life estate. In some states, life estates may not be eligible for certain property tax benefits, such as homestead exemptions or limitations on annual property tax increases.
• Right of occupancy trust. Similarly, states may limit property tax benefits when the property is held in a trust.

Which Option Is Right for You?

The choice between a life estate and a right of occupancy trust should be based on individual circumstances and estate planning goals.

A life estate might be right in the following circumstances:

• You want to stay in your home for the rest of your life and then have it pass to somebody else.
• You want to give some level of ownership to the person you name as the life tenant.

Alternatively, a right of occupancy trust might be right in these circumstances:

• You want greater control over the property and the beneficiary’s occupancy rights.
• You want to specify who is responsible for property-related expenses.
• You need flexibility in defining the terms of occupancy and distribution.

When deciding which tool is right for you or whether other options are a better fit for your estate plan, consult with an attorney for personalized advice.

Approximately three-fourths of Americans do not have a basic will.^[1] Many of the same people also have children under the age of 18, which underscores a major misunderstanding about estate plans: They can accomplish much more than just handling financial assets (money, accounts, and property).

One of the most important estate plan functions for parents of minor children is the ability to provide specific guidance about how their children will be cared for and who will care for them in case something happens to the parents.

To account for all emergency contingencies concerning you and your children, your estate plan should form a comprehensive safety net that addresses your children’s care needs and protects them from the unthinkable.

Three Tools You Need If You Have Minor Children

As parents, we instinctively strive to shield our children from harm and set them up for success, now and in the future.

While we cannot predict the future, we can prepare for it. Estate planning is a crucial step in this preparation, especially when minor children are involved. It is not only about distributing your money and property after your death; it is also about establishing ways to care for your children if you no longer can.

Your death or incapacity (inability to manage your affairs) from a sudden illness or accident is a situation that you would likely rather not think about but must consider in preparing for worst-case scenarios that could lead to a court deciding who cares for your child.

Data on parental mortality is sobering: More than 4 percent of minor children have lost at least one parent.^[2] If you wait too long to create your estate plan, it could be too late. More than any other reason, Americans cite procrastination as the reason they do not have an estate plan.^[3] Procrastinating on creating your estate plan could mean it will not be there when you—and your children—need it.

To safeguard your children’s future, three estate planning tools are particularly important: a will, a power of attorney for minors, and a standalone nomination of guardian.

Last Will and Testament

A last will and testament (also known as a will) is a cornerstone of any estate plan, but it takes on added importance when you have minor children. Your will outlines your wishes regarding the distribution of your money and property after your death. It also allows you to do the following:

• Name a guardian. A guardian is the person you want to raise your children if you and the other legal parent are deceased. The most common choice of guardian is a close family member, such as grandparents or siblings, or a close family friend.
• Establish an inheritance for your children. Because minors cannot directly inherit money and property over a certain limit set by state law, there needs to be a way to handle their inheritance for them until they reach legal adulthood. A testamentary trust (one that is created in a will) is a safe way to set aside money and property for your minor children. The terms of the testamentary trust allow you to name a trustee to oversee the inheritance. Another benefit of a trust is that you can determine when the children receive their inheritance and how they will receive it.
• Name an executor. An executor (or personal representative) is the person you designate to carry out the instructions in your will, including managing your estate and distributing your money and property. They might work closely with the guardian and the trustee to ensure that your instructions are executed smoothly and according to plan. The same person may serve in more than one role in your estate plan (e.g., guardian and trustee, guardian and executor).

Power of Attorney for Minors

A power of attorney for minors, sometimes called a designation of standby guardian or something similar depending on the state, is a legal document that empowers a chosen individual (your agent or attorney-in-fact) to act for your minor child on your behalf. This person steps in to make decisions regarding your child’s care if you become incapacitated or unavailable.

The power of attorney can grant the agent broad authority to handle various aspects of your child’s life, including the following:

• Healthcare: making medical decisions, consenting to treatments, and accessing medical records
• Education: enrolling your child in school, making educational choices, and attending school meetings
• Finances: managing your child’s finances, including accessing bank accounts, applying for benefits, and handling their inheritance
• Legal matters: representing your child’s legal interests in matters such as a custody dispute, personal injury claim, or inheritance matter
• Daily care: meeting your child’s food, shelter, clothing, and other basic needs

Although the power of attorney grants the agent significant authority, there are limits to what it permits. The agent cannot consent to the child’s marriage or adoption. In addition, many state laws impose expiration dates on these documents (e.g., six months, one year), so it is important to review and update them regularly to ensure that they remain valid.

Standalone Nomination of Guardian

While a power of attorney addresses temporary situations, such as short-term incapacity or extended travel, a standalone nomination of guardian document focuses on the long-term care of your children in the event of your death or incapacity.

Without a designated guardian, a court will decide who cares for your children. The guardianship process can be lengthy and uncertain and could potentially result in the appointment of a caretaker you would not want gaining custody of your kids.

You should name a guardian in your will. However, a standalone document that also names a guardian (if allowed in your state) offers the added benefit of being easier to update than a will, which often requires more formalities and can take longer to change.

Revocable Living Trust

In addition to a power of attorney, nomination of guardian, and will, the parents of minor children might consider a revocable living trust that holds their accounts and property during their lifetime and distributes them after their death.

You (the parent) maintain control of the accounts and property in the trust while you are alive as the current trustee. You can change the trust’s terms as needed because you are the trustmaker, and this type of trust is revocable. A revocable living trust can help avoid probate and give your children faster access to the resources they need. You can also specify how and when your children receive their inheritance, name a successor trustee to continue management of the trust if you suffer incapacity, and provide financial support for the guardian, further synergizing your estate plan.

How These Tools Work Together—and What Can Happen If You Do Not Plan

These three estate planning tools are not interchangeable; they are complementary and designed to work together to address immediate and long-term needs in a range of potential scenarios.

Imagine a scenario where both parents are in a car accident. One parent dies, and the other is severely injured and temporarily incapacitated. The agent named in the temporary power of attorney or delegation of standby guardian immediately steps in to temporarily care for the children.

If the injured parent passes away, the designated guardian (who may be the same person as the agent under the temporary power of attorney) named in the will or standalone document can provide the children with a stable permanent home. The will can be structured so that the children’s inheritance is managed through a trust that specifies how and when their inheritances should be spent and distributed.

Failure to have any one of these estate planning tools can lead to complications and unintended consequences for your minor children. For example:

• A missing temporary power of attorney could lead to delays in, or the inability to, make emergency decisions about medical treatment.
• A missing guardian nomination document could lead to a court choosing a guardian you would not have chosen. Ostensibly, the choice a judge makes will be in the child’s best interest, but do they really know your child and family dynamics well enough to make this choice?
• A missing will can also lead to a court appointing a guardian who is someone other than your first choice. In addition, your children may not receive the inheritance you intended in the way that you intended, and you lose the ability to specify how your money and property are used for their benefit. Further, they will end up getting what is left of their inheritance outright when they reach the age of majority (18 or 21, depending on the state).

Other Planning Tools and Tips for Parents

Parents should understand that they can only nominate a guardian for their child, not legally appoint one; the court has the final authority to decide, though it gives significant weight to the parents’ nomination.

If there is evidence that your chosen guardian is unfit or unable to provide proper care, the court may appoint a different guardian in the child’s best interest, even if it goes against your wishes. There is also the chance that a family member could contest your guardianship choice or your first choice of guardian is unavailable.

These outcomes are unlikely, but since they could undermine your wishes, there are additional steps you can take to minimize the risk and strengthen your case.

• In a separate letter, sometimes referred to as a letter of intent, clearly state your choice of guardian and provide a detailed explanation of why you believe this person is the best fit. Speak to their qualifications, relationship with your children, and ability to provide a stable and loving home.
• Name alternative guardians in case your first choice is unable or unwilling to serve.
• To prevent misunderstandings and reduce the likelihood of a challenge, have open and honest conversations with family members about your guardianship decision. Explain your reasoning and address any questions or concerns they may have.
• Have your will or separate guardian nomination form properly executed according to your state’s laws. To be legally binding, they may need to be witnessed and notarized and meet other requirements.

Fitting Together the Pieces of Your Estate Plan

Each part of an estate plan has a role to play, but they work best when considered as parts of a larger plan that addresses big issues such as the well-being of your minor children.

A will, temporary power of attorney, and standalone guardian document are not interchangeable; they are complementary. Incorporating all three into your plan, alongside other strategies such as a revocable living trust and a letter of intent, addresses the immediate and long-term needs of your minor children in any eventuality.

If you have minor children, estate planning is a necessity. Do not leave your children’s future to chance. Consult with an estate planning attorney to create a multipoint plan that protects you and your family.

^[1] Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey.

^[2] George M. Hayward, New 2021 Data Visualization Shows Parent Mortality: 44.2% Had Lost at Least One Parent, U.S. Census Bureau (Mar. 21, 2023), https://www.census.gov/library/stories/2023/03/losing-our-parents.html.

^[3] Lurie, supra note 1.