About Real Estate: Love and real estate can be a complex marriage

Cupid is the god of love in Roman mythology, but his arrow can’t pierce core real estate laws.

Q. I have an excellent credit history, but my fiance’s credit is pretty bad. I have been told when we marry in June, our credit histories will be merged and I will “inherit” his bad score and become liable for the roughly $10,000 he owes on unpaid credit cards. Is this true?

A. No, it’s not true. But while getting married won’t cause your sterling record to be combined with your new husband’s, it does mean his poor credit can affect the ability of the two of you to get a mortgage or other type of credit in the future.

With the passing of Valentine’s Day this week, I’m focusing on issues that entwine love and real estate.

Each of you always will have separate credit histories, even after the marriage. But, if you apply for a post-wedding home loan or other credit jointly, the lender will consider both of your histories when making its decision whether to approve or reject the application. That means his blemished record could require the two of you to pay a higher interest rate or larger fees for a loan, assuming you can get one at all.

You may be able to avoid such higher charges if you personally make enough money to qualify for a loan by yourself, because only your excellent credit score would be considered by the bank. If you apply for a mortgage in your name only and are approved, you could always add your new husband’s name to the title to the home after the sale closes — although you alone would legally remain responsible for making the payments even though your spouse would own half of the house.

Several studies have found that various financial issues, including credit problems, are the most common sources of discord among married couples. So, sit down with your fiance now and have a long and completely open discussion about your respective credit, bills and income, and future goals.

An honest conversation today may be uncomfortable, but could go a long way toward ensuring marital bless later.

Q. I live in a condominium I purchased as a bachelor several years ago, but now I am planning to marry a woman who makes more money than I do. Will it be necessary to put my new wife’s name on the title to my home? Should I ask her to sign a prenuptial agreement?

A: You aren’t legally required to put your bride’s name on the title to your longtime home. Doing so will automatically give her a half-interest in the property, but no legal responsibility to help make the monthly payments unless her name is also added to the bank’s original mortgage contract or if you refinance the loan together.

Nonetheless, you probably don’t need a full-blown “prenuptial agreement” — legal jargon for a contract that’s signed before the wedding nuptials to spell out how each of your respective assets would be divided if the marriage ends in divorce. Most attorneys say that pre-nups are needed only for those who are marrying someone with much less money or with much more debt, or for people who are financially responsible for children from a previous relationship.

People who are involved in a family-owned business also sometimes sign a prenuptial agreement to reduce the chance that an eventual divorce may jeopardize an enterprise that may have been in the bride or groom’s family for decades.

Discuss your real estate and other financial concerns about your upcoming wedding with an attorney, as well as with your sweetheart.

Q. My wife and I are getting divorced and have settled up on everything, except what we will do with our house. I want to sell it, but she wants to rent it to tenants while she lives with her mom. Would it be possible to have the divorce finalized now and then deal with the house later?

A. Yes, you can probably get the divorce completed now and figure out what to do with the home later. That’s because most states have a legal process called “bifurcation,” which allows a divorce to be finalized as quickly as the law allows even if a couple’s real estate or other financial issues haven’t been resolved.

Yet, bifurcating a divorce can cause a lot more problems than it solves — especially when a longtime home is involved. Who would make the monthly mortgage payments while the financial details of the divorce continue to be negotiated? If the home is rented out, who will be responsible for finding a good tenant and how would the monthly rental income be split?

And God forbid, what would happen if one dies after the divorce is granted but the financial details haven’t been worked out? The issue could take one, two or maybe even three years in court to resolve.

Your letter states the two of you have already conquered most of the financial issues arising from the divorce, so you should probably avoid the bifurcation process and instead redouble your efforts to reach an amicable solution for the use or sale of your longtime home. Selling the house and dividing the profits would be the easiest option.

If you remain at loggerheads, either of you can file a “partition” lawsuit that would ask a judge to order the property be sold immediately or the profits divided.

Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.

© 2011, Cowles Syndicate Inc.