For Passing a Home Along, Is My Will Enough?

A will can be enough to distribute a simple estate after you’re gone. In many people’s lives, a deed is the key asset. It can be passed along to your chosen beneficiary through a will. And no matter what other instruments you might use, you absolutely do need a will.

In short, the will can be your core estate planning document. Still, you might want or need more. Here are some points to consider.

If Your Name Alone Is on the Deed, It Can Pass Through the Will

Maybe you own your home as a solo deed holder. If so, it’s fine to pass your title along to your chosen beneficiary in your will. You can also use a will to transfer a co-owned title that the co-owners vested as tenants in common.

Of course, you could simply use a quitclaim deed and pass your interest to someone now. But a will has advantages in many cases, including the possible benefit of a stepped-up cost basis (that is, lower capital gains tax) if your beneficiary wishes to sell the real estate. Probate is a public, court-supervised process to distribute your assets according to the directions stated in your will.

It’s good to remember that the transfer might not be automatic. When your will goes into probate, your named executor will need to satisfy your debts (including the mortgage balance) first, before passing along your deed (or its left-over equity). 

Even in a community property state (where property acquired during marriage becomes joint), a home can still be set aside or “reserved” as sole property. If you owned the home before marrying, or if someone gifts or bequeaths a home to you, you may continue to keep it as sole and separate property. A family or estate lawyer can draft a legal agreement to this effect. Then, you can bequeath the home through your will. Your specific state’s law can tell you more.

A Jointly Held Deed Won’t Pass Through the Will

But what your will says about your deed won’t matter if your home is vested jointly with survivorship rights. So, check your deed.

Get a copy of your real estate deed.

This is the case if the deed says you co-own as joint tenants with rights of survivorship. The tenancy by the entirety vesting form also comes with survivorship rights.

If another person is vested with rights of survivorship, then at the time of your passing, your interest in the deed goes to your co-owner, by law.

Your co-owner will need to notify the county recorder’s office to officially record their full ownership of the home you co-owned while living.

Some Property Can Bypass the Will

Perhaps you have an interest in trust property. That asset passes to the trust beneficiaries separately from a will, to bypass probate.

Be careful not to consider trust property as an asset for your will to transfer. Sending mixed messages could mean leaving an important personal decision to a probate court.

Similarly, if your state allows property to pass through a transfer on death deed, and you decide to use this method, the property passes outside of probate and the will.

While we’re on the topic, remember that life insurance proceeds and retirement account funds pass to the beneficiaries, not through your will.

Important Reminders

Deeds.com does not offer legal, tax, or financial guidance. Our website is meant for use as a launch pad for the reader’s own due diligence. Consult a legal or financial professional for case-specific guidance, and remember to explore the medical coverage impacts and the tax impacts of deed changes.