Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeFP AnswersPersonal FinanceWould it be a mistake to buy a property with my ex-husband?FP Answers: If co-mingling assets after separation or divorce it is essential to put a clear co-ownership agreement in placeLast updated 44 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.While buying an investment property with your ex-spouse is uncommon, if you do it, just make sure you go in with eyes wide open. Photo by Sakchai Vongsasiripat/Getty ImagesWe independently select everything we recommend. Buying through us may earn us a commission, which supports our work.Q. I’m currently working on a separation and my ex-husband and I may buy a second property together to avoid extreme degradation of our finances. What are the pros and cons of doing this and what should we do to ensure the new property is split 50-50 at the time of sale? A divorce is likely to go through in a year or so and I wanted to know your thoughts on co-mingling some of our investments even after divorce. —AnonymousSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorFP Answers: The divorce process typically involves separating finances, so your proposed approach is somewhat uncommon. If you decide to purchase a new property jointly with your soon-to-be ex-husband, it is essential to put a clear co-ownership agreement in place. This agreement should define expectations around the use, maintenance, expenses and eventual sale of the property. It should also address contingencies. For example, what happens in the event of a disagreement, or to each party’s share if one of you dies.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againIt is also important to consider how joint ownership may affect future relationships. In some situations, retaining shared family assets post-divorce, such as a sentimental family cottage enjoyed by both parties, can be practical. However, overly-complex financial ties may create complications or complicate relationships with future partners.If the primary motivation for purchasing a new property is speculation that prices will rise, that may not be a sound investment rationale. Real estate values can decline as well as increase, and if prices move in the opposite direction, you could both be left holding an asset worth less than you paid. Have you maxed out your registered retirement savings plan (RRSP) and tax-free savings account (TFSA)? There are tax benefits to these accounts that you could be forgoing to bet the farm on a real-estate investment. Additionally, if the purchase is financed with a mortgage, you would likely both remain legally responsible for the debt. This could limit each of your borrowing capacity for other needs. Or it could get awkward if one of you gets into financial difficulty and the other is on the hook to make the payments.Lenders evaluate borrowers using several criteria, including “capacity,” which refers to your ability to consistently and reliably service debt payments. Real estate is not a liquid asset and carrying mortgage debt on a jointly owned property could significantly strain cash flow. If one party wishes to sell and the other does not, or if the co-ownership agreement does not adequately address dispute resolution, co-owned real estate with your ex can get tricky. These are important risks to consider.If you do proceed, you may want to ensure ownership as tenants in common rather than joint tenants with right of survivorship. Many spouses hold property as joint tenants, meaning the deceased’s share automatically passes to the surviving owner. With a tenants-in-common structure, each owner’s share can instead be directed to their estate or another designated beneficiary, which may better align with your intentions post-divorce. Tenants-in-common is more common for non-spouse co-owners.Before proceeding, it would be prudent to obtain family law advice that aligns with your separation agreement. Ensuring the legal framework supports your broader financial and personal goals will help protect both parties once the purchase is in motion. And while buying an investment property with your ex-spouse is uncommon, if you do it, just make sure you go in with eyes wide open.Andrew Dobson is a fee-only, advice-only certified financial planner (CFP) and chartered investment manager (CIM) at Objective Financial Partners Inc. in London, Ont. He does not sell any financial products whatsoever. He can be reached at adobson@objectivecfp.com.Do you have a question for FP Answers? Email wealth@postmedia.com. 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