Dear Quentin,
My younger brother suggested I reach out to you for advice about our family’s home. My older brother’s and mother’s names are on the deed of the house. He pays the monthly mortgage, and they have often had difficulty agreeing on whether to take out a home equity loan.
To help settle these disputes, would swapping me for my mother onto the deed as part owner with my brother be a sound solution? Also as a part owner, would I have the power to decide on the split on the sale of the home in the future — even if I’m not the one paying the mortgage?
Our childhood home was sold 15 years ago after my dad passed away, and at that time both my younger brother and I agreed that the equity should be used toward another home for my mother to stay in with my older brother — instead of being split among us three kids.
Now the concern is that my older brother will not honor that original wish when my mother passes away. Therein lies the question of whether I should be added as co-owner of the home to ensure a fair division when the home is sold in the future.
Our concern is that my older brother is likely to suit himself when it comes to the sale and equity split of the home. He makes irresponsible choices.
What should I do? How do I approach this with my mother and brother? Your insight is appreciated.
Representing All Our Siblings
Dear Sibling,
He may be irresponsible in some ways, but paying your mother’s mortgage — assuming she needs help — is a responsible thing for your brother to do.
It’s always a smart idea to seek legal advice before making such a big move. Putting your brother on the deed of your mother’s house was a mistake, but that’s done now. It cannot be reversed without your older brother’s permission. He is paying the monthly mortgage, so I can see why he believes it’s a fair or good outcome — for him, at least. How you approach this sticky situation depends on the kind of ownership shared by your mother and older brother, and what state they live in. But there seems to be one or more stumbling blocks to your plans.
There are several kinds of co-ownership. “Tenants in common” exist where each party owns a specific share and does not automatically inherit their spouse’s share. In New York, tenants in common are entitled to transfer their share without the consent of the other owner. However, even if this were the case with your mother and older brother, it doesn’t fully solve your problem. You would only own 50%, so you and your younger brother would each share 25%. Alternatively, your mother could simply write a will leaving that 50% share to you and your younger brother.
“Each owner is responsible for the payment of property taxes, liens, and repairs, but generally one owner pays the carrying costs of the property and is entitled to a contribution from the other owners in proportion to each owner’s undivided share,” according to the New York-based law firm NBowers P.C. “If one of the owners wishes to have the property sold entirely, they can bring a partition action through the courts, which forces the sale of the property.” (If no type of ownership is specified in the deed, it’s assumed to be “tenants in common.”)
If your mother and older brother own the home as “joint tenants with rights of survivorship” — the most common ownership agreement, particularly with married couples — they would each own 50% and would inherit the property upon the other’s death. “While an interest in a joint tenancy cannot be devised (transferred by will) a joint tenant can convey all or part of their individual interest during their lifetime to a third party, however this will sever the joint tenancy, creating a tenancy in common,” NBowers P.C. says.
It does not sound like you were intending to split the house 25/25/50 before your brother was added to the deed, but assuming your brother wishes to maintain his share, you have painted yourselves into a corner. Talk to a lawyer in your state and figure out the best strategy. It may be that you and your younger brother each end up with a 25% stake, and given that your brother is paying the mortgage, I can see why he would be comfortable with that result.
That would certainly be a good result for him, even if that would be an unhappy outcome for you and your younger brother.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Also read:
