What’s Really in a Name
I recently learned a story about a guy who went on safari in Africa and got sat on by an elephant. He stepped a little too close to the elephant because, heck, he was on a safari. He wanted to get a great photo. Instead, he got squashed.
The story appears in the book, If an Elephant Sits on You, Are You Covered? How to Talk with Your Insurance Agent to be Properly Insured, by Bart Baker.
Maybe that guy had planned for certain dangerous possibilities, like the plane crashing on the way out there, or getting stranded in the middle of the African plains without water. But I bet “don’t get sat on by an elephant” wasn’t on his list of precautions.
Sometimes stuff happens that you really don’t think is going to happen. And when it comes to the unexpected, love is the unchallenged champion. Hey, the day your hubby-to-be slips that diamond on your finger, you feel invincible. So why wait those eight extra months to start your real lives together, financially? Why not slap his name on the title to your house, here and now?
Well, hold the white roses. They might have a few thorns you haven’t considered yet.
When you add someone who isn’t your spouse or your child to your title, guess what? Your property taxes could go up. Sometimes by hundreds of dollars. We’re not kidding. A tax assessor has every right to come knocking on your door to “adjust” the value of your home every time ownership changes. But if you wait until you’re married, they can’t touch you.
Paying Way Too Many Dues
Adding your fiancé to your title could trigger something called the “due on transfer clause.” What exactly is “due” on transferring partial ownership of your deed to your fiancé, you ask? The answer: your mortgage. As in, all of it. That’s not to say this always happens. Not every lending agreement has a due on sale or due on transfer clause in it, and some lenders will be willing to let you make the transfer without calling in your mortgage. But keep an eye out for this landmine anyway, just to be safe.
Out of Control
There’s a difference between adding someone to the title and adding that same person to the mortgage. Adding someone to the mortgage transfers financial responsibility along with ownership. Adding someone to the title doesn’t transfer that financial responsibility—but it does transfer complete control of the property. That’s right, once his name is on the title, your fiancé can tear the place down or sell it if he wants to. He doesn’t need to ask you if it’s okay first (at least not legally).
And we know: your love is one for the ages. The one and only. The Happily Ever After special. Romeo and Juliet had nothing on you guys. And we’re happy for you. We truly are. But we also know that according to a study in Time Magazine, something like a quarter of all engagements are called off before they get to the “till death do us part” scene. Now, consider that 2.2 million people in the U.S. get married every year. That’s 700,000 people who change their minds about the whole marriage thing every 365 days. Odds are, at least some of them were as convinced that they’d never part ways as you are.
Now, don’t get us wrong: we’re not implying that you two aren’t a fortress of pure and everlasting love. All we’re saying is that anything can happen. Literally. So keep the deed to yourself for just a few more months. And if the elephant sits on you, at least it won’t squash your house, too.