Millennials, Marriage and Mortgages

For generations, Americans tended to (or at least aspired to) get married, buy a house, and have kids—in that order. For many reasons, economic ones particularly, the millennial generation hasn’t fallen into that pattern. This change in the order of big life events brings changes to the legal world as well, at least in the context of divorce

Financial Struggles Lead Millennials to Delay Marriage & Home Purchases

The youngest millennials are now entering their mid-20s.  The older members of the generation are approaching 40. 

Older millennials were impacted heavily by the Great Recession, which struck as many of them were graduating college and trying to start a career. Those who did find work often found it lower paying than they were counting on, due in part to a challenging job market where older workers, whose retirement accounts took big hits during the Recession, stayed on the job instead of retiring.

Burdened by huge student loan debts and skyrocketing housing prices in most large cities, many millennials found that the only way they could save enough to buy a home was to move in with their significant other. But they did not necessarily feel the need to get married, often reaching the homebuying milestone before decided to marry.

An Example Scenario

Let’s use an example to illustrate how a millennial couple might progress through their relationship (and what happens when the relationship ends).

Lisa (33) and Brian (35) were in a relationship for nine years before they married. Brian proposed to Lisa seven years into the relationship. 

About a month after they got engaged, Brian bought a house. He took out a mortgage in his name only, and his name was the only name on the property deed. The couple intended that the house would be for both of them, and they decided together that buying before marriage made financial sense. 

After closing, Brian and Lisa moved in together. They lived in the house for about a year, and then got married. Before the marriage, they each paid half of the mortgage and bills from money in their own personal accounts. After the wedding, the couple opened a joint account and paid from that. 

After two years of marriage, Brian filed for divorce. The question is: what rights do Brian and Lisa each have to the house?

How Texas Law Applies to This Scenario

Texas is a community property state, so the house is treated as Brian’s separate property because he bought it before marriage and his name is on the deed. As a result, the judge will not award the house to Lisa. 

Can Lisa seek reimbursement of any house payments? Well, each party was paying half the mortgage before marriage. Most likely, Lisa’s payments would be considered gifts to Brian and she is unlikely to be reimbursed for these pre-marriage payments.

Now, the mortgage payments made during the marriage are a different story. Lisa can request reimbursement for her portion of those payments, because they were made with “marital funds.” She would argue that Brian’s estate benefited from those marital funds, which were partially hers, so she should get money back.

However, under Texas law, Lisa would only be entitled reimbursement of funds that were allocated to mortgage principle, not to mortgage interest. The judge would have full discretion to decide how much Lisa receives.

Millennials, Marriage and Mortgages
The Fort Worth divorce lawyers of the Law Office of V. Wayne Ward help people of all ages through divorce. Call 817-789-4436 for a consultation.

Cohabitation Agreements Can Help in These Scenarios

Unmarried millennial couples (and any other unmarried couple) can protect themselves and their property better than Brian and Lisa did by creating a cohabitation agreement. Such a document could have stated that Lisa would get full reimbursement for mortgage payments made before marriage. This would prevent her from having to start over financially after the breakup.

The attorneys of the Law Office of V. Wayne Ward in Fort Worth can advise you on cohabitation agreements and all other legal issues affecting the end of any relationship. Contact us anytime to arrange a confidential attorney consultation.