Buy home with girlfriend, leave out wife?


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Dear Real Estate Adviser,
My girlfriend and I found a great opportunity to buy a home in Maryland and need to act fast. However, I’m still legally married to a woman in Delaware and we’re not legally separated. Is there a way to buy a home now where my wife can’t claim partial ownership in it?
— Warren P.

Dear Warren,
There are ways, but tread very cautiously. Though Delaware is not a community property state like California or Texas, where it might be even more of a challenge to keep such a house purchase separate from the marital estate, Delaware doesn’t recognize legal separation, at least technically.

There are, however, alternative legal agreements there that will allow you to formalize your separation terms, some of them do-it-yourself forms that I wouldn’t recommend in your circumstances.

While property owned jointly by a couple is typically divided as of the date of separation, you wouldn’t want to risk giving your soon-to-be ex a one-fourth ownership in your new place should she allege you used marital funds to purchase it. If you two remain strongly at odds, that might even open the door for her to seek other financial concessions, such as increased alimony. Better seek out a Delaware family law attorney, but fast. Depending on your circumstances, you may well have to initiate divorce proceedings to fully safeguard yourself.

You don’t say how long you’ve been separated, but I assume that she is getting on with her life as you are. And if you and your wife agree to an amicable split (yes, it does happen), you can just tell her of your intent to buy a house and ask if she’ll sign an agreement stating she has no legal interest — or “homestead rights” — in the new house. To do this, you’ll likely need to specify where your purchase money came from in order to reassure her that it’s not from your collective marital property. If she agrees, have a notary present when you each sign. You would then file the original agreement with the court clerk handling your family law case for your divorce.

Of course, this will all take some time. So if you absolutely must have that house right now, your girlfriend may have to purchase it in her name with an agreement that your name be added after your divorce is settled. In that scenario, I’d advise you to protect yourself by having a Maryland attorney write up the paperwork, which is not exactly romantic. Another warning: Such arrangements (or pending litigation of any kind) tend to make lenders nervous.

Another, less likely, option is to strike some type of rent-to-own agreement with terms heavily favoring the owner of this dream home, though that’s not too likely in this seller’s market.

This is all starting to get convoluted and expensive, isn’t it? Frankly, you’re probably better served to just rent a place for now and find another dream home later unless, as stated, your wife is exceptionally reasonable. Whatever you do, waiting any longer to file for divorce will only delay your plans to move on with your life. Good luck!

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