When someone who owns real property dies, the property goes into probate or it automatically passes, by operation of law, to surviving co-owners. Often, surviving co-owners do nothing with the title for as long as they own the property. Yet the best practice is to remove the deceased owner’s name from the title.
Here, we review some common scenarios, and reasons to update a home’s title after an owner’s death.
When a Sole Owner Dies
When a piece
of real estate is owned by one person, and that person dies, what happens? If
the title was vested in the deceased
person as the sole owner, the property goes into probate.
The court-supervised probate process effectively removes the deceased owner from the title.
The personal representative deed (see a representative sample), in addition to identifying the personal representative, states the decedent’s name and date of death, identifies the grantee, and includes a legal description of the property, the date of the last will and testament, the probate date, and the county. The personal representative will sign it before a notary public, and record the deed in the county where the property exists.
After taxes and debts are paid, the county probate court authorizes the estate’s personal representative to convey the title to the beneficiary named in the will. If the owner dies intestate (without a will), the state law of intestacy directs property to go to specific relatives. The personal representative deed is not a warranty deed. Therefore, the grantee (recipient of the property) will get no guarantees regarding the title’s history before probate. The recipient can avoid risk by rejecting the inheritance—or, as most do, by obtaining title insurance.
When the Property Was Held by Tenants in Common
If the deceased owner held the property jointly, the deed names every owner. And if the title was vested in the deceased as a tenant in common, each person held a specific percentage of the property. Check the deed to find the percentage owned by the deceased.
In this case, too, the ownership interest goes into probate. After the probate court removes the deceased owner from the title, the personal representative will distribute the property not to other co-owners, but to its beneficiary under the will or the correct heir under the state laws of intestacy.
If there is a will, the personal representative is the executor, who, at the conclusion of probate, conveys the property. The property may have to be sold through an executor’s deed to a third party, and the proceeds divided among multiple claimants.
Here again, the probate process removes the deceased owner’s name from the title.
When the Deceased Owner Is Survived by a Co-owner With Survivorship Rights
Co-owners in joint tenancies or tenancies by the entirety can have a right of survivorship interest.
The surviving joint owner with rights of survivorship (“JTWROS”) continues to own the property, inheriting the share of the deceased person by operation of law, after the other owner dies. Probate is unnecessary. In some states, couples can choose to hold property as tenants by the entirety. When one spouse dies, the co-owner with a right of survivorship takes title by operation of law. No new title risks enter the picture when property passes to co-owners by operation of law.
While nothing needs to be done, the best practice is for a surviving owner to formally record the transfer of the interest. File an affidavit of survivorship with the recorder’s office to remove the deceased person’s name from the title.
When the Death Occurs in a Community Property State
When couples share real estate as community property, too, real estate automatically passes upon death. The deceased spouse’s or domestic partner’s interest fully passes to the surviving co-owner.
If there is no spouse and the deceased left no will, look to the state’s intestacy statute, which designates the heirs.
Here again, before selling or refinancing the property, clearing the title is important. If the spouses had a valid community property agreement, the surviving co-owner may clear the home’s title by recording that agreement, and no probate process is required. Otherwise, undertake a court-supervised probate proceeding to transfer the title into the surviving life partner’s name.
Notes on Bypassing Probate
Check state law for filings that may be needed. For example, in Washington, the surviving life partner or heir needs a copy of the death certificate, a lack of probate affidavit, and an excise tax affidavit to report the legal, non-taxable transfer of ownership to the tax authorities. The lack of probate affidavit certifies that the death and legal transfer have actually occurred. It is also used to obtain title insurance. But while a lack of probate affidavit may enable the heirs to later convey or refinance the home, it does not serve to remove a deceased owner from the title. Thus, a lack of probate affidavit is no substitute for probate itself.
State laws on property conveyances without probate vary. The assistance of an experienced attorney is invaluable.
Naming a Beneficiary: The Transfer on Death Deed
Certain states allow transfer on death deeds to transfer real estate to a designated beneficiary. If the property is in one of these states, the deceased person might have created a revocable transfer on death deed while alive.
Upon the owner’s death, the county receives the certified copy of the death certificate and notarized affidavit of death, and the transfer on death deed is executed. The instrument avoids probate, yet legally transfers the title.
A transfer on death deed is not a warranty deed. Debts on the property become the beneficiary’s responsibility. The best recourse of the beneficiary is to obtain title insurance in advance of any issues. Before accepting the deed, the beneficiary should be sure the title company will issue a policy for a home conveyed in this way.
Getting Through the Process: The Basic Checklist
In most cases, the surviving owner or heir obtains the title to the home, the former owner’s death certificate, a notarized affidavit of death, and a preliminary change of ownership report form.
When all these are gathered, the transfer gets recorded, the fees are paid, and the county issues a new title deed.
Dealing with paperwork is never easy, especially after the loss of a loved one. But it’s worthwhile. It keeps the title up-to-date, facilitating a home sale when the time comes.
Community Property Statutes:
Alaska Stat. § 34.77.090
Idaho Code § 15-6-201
Tex. Probate Code Ann. § 451
Wash. Rev. Code § 26.16.120
Wis. Stat. Ann. § 766.58