The transfer of assets and belongings after one’s death can be complex. There are numerous legal procedures and formalities that dictate the entire process, all of which must be handled in a timely manner. One such process to be aware of has to do with the transfer of real estate after one’s death. You may be wondering, “Can a house stay in a deceased person’s name?”
The answer, simply put, is no -- a house must transfer ownership after the original owner’s death. This will require a new title be issued, which can be quite tricky without an Estate Plan. Below we will discuss possible scenarios and stipulations surrounding the transfer of property ownership after death. Keep reading to get answers to the following questions:
What Happens to a House When the Owner Dies?
When the owner of a house dies, the property must go through the Probate process. Probate is essentially the court-supervised act of paying debts, closing accounts, and distributing the assets and belongings of an individual after their death. Generally speaking, assets such as real estate will either switch ownership to a beneficiary or be sold to pay for any debts.
What Happens to a House if the Owner Dies and There Is a Will?
When the owner of a house dies and there is a Will, the house will pass to the beneficiary named in the document. Once Probate court has validated the Will, the Executor can assist with transferring the property to the heir. This is typically the simplest way to transfer the home after an owner dies.
In some cases, the property may need to be sold before ownership can be transferred (despite the existence of a Will). The Executor will make a decision based on the size of the mortgage and debts, while taking any other assets into consideration. If the Estate does not have enough assets to close out these debts, it is possible for the Executor to sell the property before it can be inherited by an heir.
What Happens to a House if the Owner Dies and There Is No Will?
If the owner of a house dies without a Will, all property and assets will be distributed by Probate Court according to the Intestate Succession laws of that area. These laws are established on a state level, and the exact practices will depend on where the deceased was living.
The Probate Court will determine whether or not to sell the property to cover debts or any legal fees associated with court proceedings on behalf of the Estate. If the Court does not sell the home, it will be distributed according to your state’s Next of Kin laws. In most areas the progression of property ownership will go to a spouse, child, parent, or sibling (in that order).
Can a House Stay in a Deceased Person's Name?
A house cannot stay in a deceased person’s name, and instead ownership must be transferred according to their Will or the State’s Succession Law. Once the new owner is determined, that person must file for a new deed for the home with the county recorder’s office. This will typically require an official copy of the Death Certificate and a statement from the Probate court.
The purpose of transferring the title is to ensure the new owner can rightfully pay property taxes and transfer the utility connections. This will allow the Executor of the Will or Probate Court to officially close out these accounts on behalf of the deceased. There may be some fees associated with this process, but again it will vary from state to state.
What Happens to a Jointly Owned Property if One Owner Dies?
If the owner of a jointly-owned property dies, the surviving owner will typically receive full ownership of the home. In most states, the property will completely avoid Probate and be transferred directly to the surviving owner. This process is completed through a legal arrangement called joint-tenancy with right of survivorship.
Joint-tenancy is commonly used by married couples who own property. When one spouse dies, the property can automatically transfer ownership to the other spouse. Despite these protections, the property should still be included in an Estate Plan because after the death of the surviving spouse the property will still be subject to Probate.
There are a few exceptions to be aware of when considering jointly-owned properties. In community property states, such as California or Texas, an heir could have a partial claim to a jointly-owned property. For example, if an unmarried couple owned a home together and one owner died, their portion of ownership could be inherited by their next of kin. The creation of an Estate Plan can help prevent these situations, such as the use of a Transfer on Death Deed.
What Happens to a House When the Owner Dies and There Are No Heirs?
If the owner of a house dies with no heirs, Intestate Law will be used to determine the next possible beneficiary. Probate Court will apply these laws to identify the closest living family member. In the case that there are no surviving relatives and no Will, the state will take possession of the property.
How to Protect Your Estate Property
The best way to protect your home from lengthy probate proceedings and potentially becoming property of the state is by creating an Estate Plan. This is crucial for every homeowner, no matter your marital or ownership status. The creation of a valid Will helps guarantee that you decide who inherits your property and other belongings.
Many individuals choose to wait until later in life to create an Estate Plan, as that has been the norm for so long. However, writing a Will after buying real estate (or any other asset for that matter) is an excellent way to protect your property and take care of your loved ones if anything were to happen. Reach out to our team today if you are interested in getting started from the comfort of your own home.
Many individuals are unaware of what the Probate process entails, especially for larger assets like real estate. If you have ever asked, “Can a house stay in a deceased person’s name?” you are not alone. The transfer of property and assets after death is confusing and often involves court supervision. Create an Estate Plan today to provide yourself, and your family, with peace of mind about the future. Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!