Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!)
Dear Pay Dirt,
My sister and I have always been really close, and we married two guys we met in college who were best friends. (We didn’t plan it that way, it just happened!) The four of us moved to New York after college and worked in creative jobs making very little money, mostly. Then a few years ago, we all had the opportunity to buy a small house upstate together.
The house was underpriced and the seller was motivated to get rid of it, so we got a deal. We were able to buy it because one of us (my sister’s husband) had just received a substantial inheritance, which he used to buy the house in cash. Until the house came up, his plan had been to put that money in an index fund, so we decided that he’d buy the house and we’d each pay back into a retirement account in his name each month. (So he essentially “loaned” himself and us the money.)
The house is only in my sister’s husband’s name. I know this sounds stupid, but it seemed complicated to get it to be in all of our names, and so we skipped that part. We all trust each other completely, and we definitely agreed from the start that this was our shared house together—we split all repairs and insurance costs and other house costs equally. It’s been several years now, and my husband and I are about halfway to our “break-even” number on our contributions for the house. Everything is working out, we all enjoy it and use it regularly. I was telling a new friend about the arrangement recently and she looked at me like I had two heads and told me she thought my husband and I were stupid for doing this on a handshake. She thinks we should insist that once we hit our break-even number on our contributions (so, half of the total cost of the house, which will still take a couple of years), we get to be on the deed to. She was so sure! But she couldn’t really articulate why. What do you think?
—House Share
Dear House Share,
It sounds like the arrangement you all agreed on has been working really well for years. But the fact of the matter is that you and your husband are paying into an asset you don’t legally own. If something went sideways—divorce, a medical emergency, someone needing to liquidate assets—you’d really have no legal claim to the house, even though you’ve contributed for years. That’s what your friend was likely trying to articulate.
None of this is to say that your brother‑in‑law is untrustworthy. But life is unpredictable. If the worst happened—he passed away or he and your sister split up—it would create a sticky situation for everyone. Right now, if he ran into some financial trouble and needed to sell, he could. You don’t have that same option.
You made a decision based on trust, convenience, and the desire to grab a good opportunity, and plenty of people do that. But now that you’re several years in, and halfway to your break‑even number, it’s reasonable that you’d want to make things legal. Doing so protects everyone because it formalizes the arrangement, which will prevent any future misunderstandings.
Start the conversation. But when you bring it up, don’t think of it as a confrontation. Frame it as a conversation about formalizing something that’s already in place. You could try something like, “Hey, now that we’re halfway to our break‑even number, let’s make the paperwork match what we’ve all been doing in practice.” Suggest sitting down with a real estate attorney that will add you and your husband to the deed once you’ve hit the agreed‑upon contribution. The arrangement works, and you want to keep it working. It’s a small step that prevents big headaches later, and if you present it that way, it won’t feel like a confrontation.
—Kristin
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